Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Sugar Beet

Mr. MacGregor: asked the Minister of Agriculture, Fisheries and Food when he expects to announce his decision on the negotiations on the 1976 sugar beet contract which has been referred to him.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): Perhaps I should preface my answer by saying that my right hon. Friend is sorry for his absence, but he is attending the very important stock-taking meeting of agricultural Ministers in Luxembourg.
The British Sugar Corporation and the National Farmers Union reached agreement yesterday on the terms of the 1976 sugar beet contract.

Mr. MacGregor: Although this is welcome news, is the Minister aware that this contract was accepted by only a narrow margin among farmers, largely due to the fact that part of the extra award to them, the £1 per ton that they were given on the guaranteed price, has been pre-empted in the sense that the first £1 increase from any further devaluation of the green pound or the next price review will go to the British Sugar Corporation and not to the fanners?
In view of that, and in the light of the poor beet yields because of the weather, in the past two years, will the Minister stress to his right hon. Friend that it is essential that he guarantees that before the farmers have to sign their contracts next year he will seek the most favourable price review possible, so that the farmers

will be encouraged to have confidence again in the crop and will obtain the extra acreage which for economic reasons the Government quite rightly seek?

Mr. Strang: I am sure that the hon. Gentleman himself will recognise that the price of sugar beet has been increased enormously over the last two years. It is true that the adjustment to the green pound made it easier for agreement to be reached, but agreement has been reached, and I think that we can look forward to an expansion in the sugar beet acreage next year.

Butter Production

Mr. Moate: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the present level of butter production in the United Kingdom.

The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop): In the first eight months of this year, the latest period for which figures are available, United Kingdom production of butter was 35,323 tonnes.

Mr. Moate: How can the Government expect people to "buy British" when the Minister of Agriculture has done his best to ensure that there is very little of this country's fresh butter for the housewife to buy? Is it not a remarkable achievement on the part of the Government that this country, which is so rich in dairy resources, produced virtually no butter whatsoever in September, very little in October, and throughout the whole of year will produce only 6 per cent. of our total consumption? What steps will the Minister now take to restore the fortunes of our dairy industry?

Mr. Bishop: The hon. Gentleman will realise that the industry decides the allocation of milk for different purposes, and he will know that butter is not the most profitable of the outlets. The decline is due not simply to the fall in milk production but to more milk being used for liquid consumption and for cheese and for other products. My right hon. Friend has made a very substantial increase in the guaranteed price to the industry.

Mr. Jay: Will my hon. Friend confirm that that aid for the private storage of butter is being paid out of public funds in this country, and that as a result some


thousands of tons of butter are now kept in storage away from the consumer?

Mr. Bishop: I am unable to confirm that allegation. What I will say is that butter has not been one of the priority manufactures of milk products for some years, and we are producing more cheese now than ever before.

Mr. Geraint Howells: Is the Minister aware that many dairy producers in this country believe that they have lost the butter market to their counterparts within Europe? Will not the Minister agree that the dairy producers in this country need another 5p or 6p per gallon to cover their costs of production?

Mr. Bishop: The hon. Member should realise that since we have been in power the guaranteed price of milk has gone from 26·27p per gallon to a level of over 40p per gallon now, an increase of 52 per cent. I feel sure that this will give encouragement to our dairy producers.

Mr. Maxwell-Hyslop: Is not the hon. Gentleman aware that once a farmer has gone out of milk production and is no longer, together with his employees, working a seven-day week, it will take more than a small adjustment in the price of milk to get him back again? Does not the Minister yet realise that the country simply cannot afford the foreign exchange to import the butter now being imported because milk production has dropped so catastrophically?

Mr. Bishop: The hon. Gentleman should be aware, and the House should be aware, remembering the depressed state of the industry two years ago, that my right hon. Friend has probably done more for the dairy industry than has been done for any other group in our national economy. I feel sure that the action he has taken will help to restore the confidence which is necessary for increased production, as indicated in our White Paper.

Whaling

Mr. Steen: asked the Minister of Agriculture, Fisheries and Food what are the margins of error in the International Whaling Commission estimates of: (a) sperm whale populations in the Southern Hemisphere, and (b) sperm whale populations in the North Pacific; what are the margins of error in the International

Whaling Commission's estimates of recruitment rates of these two populations; and what are the margins of error in the IWC's estimates of maximum sustainable yield and in the IWC's quotas for these two populations.

Mr. Bishop: This is an extremely complex and technical matter and it would be more appropriate for me to write to the honourable Member at a later stage. Sperm whale data and population calculations are to be studied at a special meeting of the Scientific Committee of the International Whaling Commission early next year.

Mr. Steen: Is the Minister aware that Opposition Members wish to preserve what is best in the world? Therefore, will he see to it that Britain sets an example to other countries by promoting mammal welfare and by outlawing those who overhunt the whale and put it in danger of extinction?

Mr. Bishop: The Government are represented at the International Whaling Commission. This is an organisation that covers most of the major nations concerned with whaling matters. This country has not been engaged in whaling since 1963. If the hon. Gentleman is suggesting a moratorium on all whaling, we believe that that is unwarranted, because the Whaling Commission has adopted an effective management procedure to control whaling. This was a matter concerned in the so-called Australian amendment at the recent International Whaling Commission's talks in London.
We must be realistic about this. There is a real danger otherwise that the whaling nations will withdraw from the commission, which would result in our having unregulated whaling. But there is no real danger to some of the species that the hon. Gentleman has in mind. Only five species are now hunted commercially. The remainder are under indefinite moratoria.

Mr. Mark Hughes: Is my hon. Friend aware that, in answer to a question that I asked in the European Parliament, I was told that it was against a number of regulations introduced in 1965 or 1966 for any member State to have quantitative controls on the import of whale products? Where are the current regulations


restricting the import of whale products into this country in conformity with those regulations?

Mr. Bishop: I said something earlier that I must emphasise. Any action taken should be with the agreement of most nations, or we shall get unregulated procedures. But since March 1973 there has been a ban on the import of all whale products except the major products of the sperm whale. Sperm whale stocks are not in danger at present. We are seeking as much as possible to find substitutes. Until then, the present situation must continue. But there is no real danger to the species that the hon. Member for Liverpool, Wavertree (Mr. Steen) has in mind.

Fishing Fleet

Mr. Beith: asked the Minister of Agriculture, Fisheries and Food what assessment he has made of the likely future size of the British fishing fleet.

Mr. Bishop: I have nothing to add to the reply given by my hon. Friend to a very similar Question by the hon. Member on 23rd October.

Mr. Beith: Since the Minister is apparently unable to make an assessment, on what assumptions did he end the operating subsidy last week? How can he reconcile allowing the British fishing industry's catching capacity to be reduced drastically as a result of the laying up of vessels with our negotiations with our EEC partners and other countries in the North Atlantic Sea Fisheries Committee about the future fishing requirements of various countries?

Mr. Bishop: I have to make an apology to the House. Instead of skipping the reply to Question No. 4, I read it in reply to the hon. Member for Berwick-upon-Tweed (Mr. Beith). However, the Question is much the same, and I have an equally good reply for the hon. Gentleman. My original reply should have been that any such assessment would be premature if made prior to certain knowledge of the fishing opportunities open to us in the future.
Now perhaps I may deal with the hon. Gentleman's supplementary question. He will realise that there are many factors still undecided, including the 200-mile limit matters, considerations by the Law

of the Sea Conference, the common fisheries policy, and our attempts to have continued access to various parts of other countries' areas. These and other matters are all so uncertain that it is very difficult to make a clear assessment of the future size of the British fishing fleet.

Mr. McNamara: It appears that at the moment the British Government have no policy for fishing. We seem to depend on other people's decisions, and the Government will not give any outline of their proposals for our fishing industry, whether it be the deep water industry or the in-shore industry. They are very important industries which depend upon our having an effective fisheries policy. When are we likely to see something of it from the Government?

Mr. Bishop: Let me outline a few of the principles on which we are proceeding. The House will realise that we are negotiating with Iceland about continued access to its waters. We had conversations in London a week ago with a representative of the Norwegian Government about continued access. We have made clear our views on the 200-mile limit. We do not believe in unilateral action of the kind taken by Iceland. We want agreement at the Law of the Sea Conference. As my right hon. Friend said clearly in Brussels last April, we also want a very early reconsideration of the common fisheries policy. These are markers. We cannot anticipate what the situation will be in relation to the negotiations which are going on quite urgently about all these matters.
As for subsidies to the fishing fleet, we have made it clear that we are anxious to ensure that the fleet does not contract unduly in the time before the matters to which I have made reference are resolved. The House will be aware that we have made available £10 million this year in financial aid to the industry to help to maintain it until we know the answers to some of these questions.

Mr. Hicks: In view of the fact that the Government have shown their total insensitivity to the problems facing the in-shore fishing sector, will not the Minister agree that there is an urgent need for an inquiry and an analysis of the fishing industry so that those concerned with production may know where they stand, not just for months, but over the next few years?

Mr. Bishop: The hon. Gentleman will recognise that inquiries are all very well. We want evidence of future trends. I think that it will be agreed that we are not yet in a position, nor is the industry, to recognise—[Interruption.]

Mr. Speaker: Order. There appears to be a private row in progress. It must not happen.

Mr. Bishop: The industry and hon. Members on both sides of the House are not yet able to recognise the future trends. But, in the meantime, the Government have acted. Not only have we introduced capital grants to vessels by raising the moratorium imposed by the previous administration; we have introduced temporary aid, which is of great benefit to the industry.

Mr. Powell: When will the Government realise that there is a point beyond which we cannot allow the fishing opportunities to which the Minister referred to be restricted and reduced by the unilateral action of other countries? Will the Government desist from throwing away any cards that they may possess by forswearing unilateral action in advance?

Mr. Bishop: It should be recognised that while we deplore unilateral action by other countries, it would be improper for us to say that this was a course that we should pursue ourselves. The right hon. Gentleman will recognise that the best way to get orderly conduct amongst the fishing nations is to take action with regard to 200-mile or other limits by general agreement and not by the kind of action being taken at present.

Mr. Henderson: Is the Minister aware that the fishing industry is sick and tired of the kind of waffle that we are having here today? Does he not realise that the Icelandic Government are extending their limits, that the United States Government now have a Bill going through Congress to increase their limits, that the Canadians are proposing to increase their limits, and that the Norwegians wish to increase their limits? Are we to be the last country to do so?

Mr. Bishop: I do not see why the hon. Gentleman should be getting so excited. The Law of the Sea Conference is due to meet next February in New

York. We believe that that will be the occasion to make our views known. But we have emphasised already that we believe in going to 200-mile limits by agreement. It is to the benefit of all to have general agreement on this rather than to take unilateral action.

Mr. Robert Hughes: Does the Minister agree that it is time we had a White Paper on the fishing industry so that the Government could put all the different views into perspective and so we could see exactly on what basis they would wish the common fisheries policy to be renegotiated? If that were done, we would know what was happening and be able to give some confidence to the fishing industry, which at present has no idea where it is going.

Mr. Bishop: The House has debated the fishing industry on numerous occasions of late and is well aware of the Government's views on this matter. It is difficult to define the future shape of the industry until some of the factors are known. There are indications that the matters which are now in doubt will be decided in the near future.

Mr. Beith: In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall try to raise the matter on the Adjournment.

Mr. Mudd: asked the Minister of Agriculture, Fisheries and Food what arrangements he has made for the continuation of subsidies on fishing vessels.

Mr. Bishop: I refer the hon. Member to the reply given to my hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson) on 23rd October.

Mr. Mudd: Does the Minister recognise the apparent inconsistency on the part of the Government who for convenience will back-date the award to the fishermen by three weeks beyond the date on which it was agreed, but who will not back-date the award to the shareholders of Nation Life? In the light of the subsidy, is the hon. Gentleman aware that there is growing fury among the majority of Cornish inshore fishermen, who do not enjoy the subsidy, when they see their fishing grounds constantly and consistently raped by the fishermen of Scotland who do enjoy the subsidy?

Mr. Bishop: I should hesitate to get involved in the kind of argument that the hon. Gentleman has put forward. I recognise his concern. I think that he is referring to vessels under 40 ft. whose owners have not had the subsidy. In reply to that serious aspect of his question, the answer I must give is that, in deciding what subsidy to give from January until December this year we have had to have regard to helping the sector that provides between 90 per cent. and 95 per cent. of the white fish. We have helped a substantial part of the industry by doing that.
The second point about the subsidy is that it has been given as temporary financial aid to maintain the great mass of the fleet and to stop undue contraction by boats going out of service until the time, which we hope will be soon, when we can see what the future shape of the industry must be.

Mr. Prescott: Does my hon. Friend agree that it is about time we reviewed the whole principle involved in the giving of subsidies to the fishing industry? Let it be made quite clear that the giving of subsidies should be tied to improving working conditions in the industry, conditions which are highly dangerous and of a most deplorable kind. No subsidy should be given until the conditions of the worker are improved.

Mr. Bishop: I recognise my hon. Friend's concern. There are two points to be made. First, the temporary financial aid was a quick form of help to the industry when it needed help. Secondly, the subsidy is intended to be phased out in December. The second point, about which my hon. Friend has rightly expressed concern, is a matter for my right hon. Friend the Secretary of State for Trade. My hon. Friend will be aware of the steps taken to increase safety and to improve conditions on vessels generally. These steps have been welcomed by the industry.

Mr. Donald Stewart: Is the hon. Gentleman prepared to repudiate the offensive remarks of the hon. Member for Falmouth and Camborne (Mr. Mudd)? Does the hon. Gentleman accept that it is riot possible for fishermen in one part of the United Kingdom to keep fishermen from another part out of their area?

[HON. MEMBERS: "Oh! Long live the Union."]
As regards the phasing out of subsidies; in the not unlikely event that many fishermen will have to default on repayments to the White Fish Authority and the Herring Industry Board, what action will the Government take? Will they seek to repossess vessels, or will they declare a moratorium on payments?

Mr. Bishop: One of my objectives in life is to keep my hon. Friends happy. I do not intend to become involved in pursuing that objective with Opposition Members. As regards a moratorium, it would be unfair at present to take any action on the matter. The subsidies that we have announced are intended to help the industry over a difficult period.

Common Agricultural Policy

Mr. Biffen: asked the Minister of Agriculture, Fisheries and Food what proposals have been made to the EEC Council of Ministers and Commission to secure a major reorganisation of the Common Agricultural Policy.

Mr. Strang: The Commission's stocktaking report provides a valuable basis for the Council to consider further changes in the common agricultural policy to supplement the improvements which have already been made over the last 18 months. As my right hon. Friend indicated to the House in the debate on 17th October, he will be pressing for measures to implement the broad approach he outlined to the Council on 28th-29th April.—[Vol. 897, c. 1719–1822.]

Mr. Biffen: Does the Parliamentary Secretary agree that in the reorganisation the principle should be established that those who create surpluses have a major financial responsibility for their disposal? In that context, does he agree that neither the British dairy farmer nor the long-suffering British taxpayer should be disadvantaged by the existence of massive stockpiles of dried milk?

Mr. Strang: Yes, I agree with the hon. Gentleman. The Government believe that there should be coresponsibility with the producers for surpluses that are created. We must crack down hard on structural surpluses in the Community. At the same time, where we are efficient.


it is consistent with the policy to expect us to get a bigger share of the Community market and I am confident that we shall achieve this in dairy products.

Mr. Fernybough: Does my hon. Friend accept that it is a grave affront to many people in Britain that we milk cows to produce butter, to turn into cattle feed, to feed back to the cows, so that they can produce more milk? At a time when on television we see starving millions in the rest of the world, should we be deliberately destroying food?
Last night on television there was a programme showing tens of thousands of tons of apples being destroyed. As many children in this country are not getting the necessary amount of vitamin C, will he accept that any system that destroys edible food that should be married to empty stomachs is indefensible? Will he put an end to it?

Mr. Strung: Yes. I agree with my right hon. Friend. I accept the substance of what he has said about skimmed milk powder, but I must add that there are some instances and some systems of production in which we use skimmed milk powder. That has always been so and I am sure that my hon. Friend will expect that to continue.
My right hon. Friend has mentioned apples. We are opposed to any system that allows the destruction of food. We argue strongly that where food has to be withdrawn from the market because it cannot be sold at below predetermined prices, it should be distributed to hospitals, schools and other charities.

Mr. Jopling: Is the Minister aware that we are somewhat surprised about the undue prominence at current meetings of his right hon. Friend the Secretary of State for Prices and Consumer Protection? Has the Minister had an opportunity to look at the tape in the last two hours reporting what the right hon. Lady said at the meeting this morning? She said on the one hand that there was a need for a better deal for consumers, but, on the other, that there was a need to strike a balance between the security of food supplies and consumer prices. Is the Minister aware that the right hon. Lady's influence over the past year or so has largely contributed to the catastrophic decline in livestock produc-

tion and therefore the food production of this country? As a consequence of the right hon. Lady's statement, will nothing be done to halt this decline?

Mr. Strang: The statement that the hon. Gentleman has attributed to my right hon. Friend puts very well the Government's policy in this area. We have to strike a balance between the consumer and the producer. That is what we are doing in milk and other commodities. We recognise that farmers have had enormous increases in costs and that is why we have put the milk price up twice in the past few months—if we include the increase which is due to take place next month.

Dairy Industry

Mr. Ridley: asked the Minister of Agriculture, Fisheries and Food what plans he has for the future of the dairy industry in Great Britain.

Mr. Bishop: The Government's conclusions on the possible development of milk production over the next few years are set out in the White Paper "Food from our own Resources".

Mr. Ridley: Is the Minister aware that the system of the gentleman in Whitehall who determines the milk price has now been shown to have been a failure over many years? He has always been too slow and too stingey, with the result that there has been a fall back in production. Has the Minister drawn the right conclusion—that it is time to return to a free market in milk as the only possible way to equate supply with demand?

Mr. Bishop: The hon. Gentleman's suggestion is rather novel, because the industry has been well served over the past 40 years and the Milk Marketing Board has played an important rôle in the regulation of our milk supplies and so forth. The expectation of the monthly milk cheque by our farmers is one sure thing that gives them confidence. The changes in the green pound and the other measures to which I have already referred are also likely to increase confidence in the industry.

Dr. Edmund Marshall: What size of national dairy herd do the Government wish to have?

Mr. Bishop: I remind my hon. Friend of the objective of our White Paper, which is to increase milk production in the period up to the 1980s by about 620 million gallons. We must be judged on our policies on the longer-term prospects.

Mr. Boscawen: Does the Minister realise what a pathetic answer he has given? Does he not know that the milk producers regard the White Paper as a sick, palsied joke? When will he do something about it? What about the people who produce cheese and other products and who are being thrown out of work in many areas because of the Minister's policies?

Mr. Bishop: If the hon. Gentleman reflects, I do not think that he will say that the answer I have given is pathetic. Soon after coming to power in February last year my right hon. Friend increased the returns for the milk industry by approximately £100 million. There have been a number of changes since then. The change that we announced in the House only a week or two ago amounted to giving another £50 million to the industry. I should not have thought that I had given by any means an inconsiderable answer. I am sure that it will instil and increase confidence in the industry.

Mr. Michael Latham: asked the Minister of Agriculture, Fisheries and Food whether he is satisfied that his recent announcement on the milk price will enable the recent decline in production to be halted.

Mr. Bishop: As my right hon. Friend indicated in his statement on 15th October, we are sure that the further increase in the guaranteed price of milk will help to meet the milk producers' difficulties.

Mr. Latham: Has any significant number of farmers facing the practical problems of recovering from disasters during the last few months expressed any view to the Government other than that their recent action is far too little and too late?

Mr. Bishop: It is all very well for the hon. Gentleman to sneer about it being too little and too late. It is a general comment which I identify with most Oppositions on these matters. In the four changes in the green pound since we took

office, compared with no change in the green pound when right hon. and hon. Gentlemen opposite were in power, we have recognised the needs of farmers and milk producers in relation to the needs of consumers. Having awarded another £50 million only a few weeks ago, I can hardly think that that will do nohing to inspire and restore confidence in the industry over a period.

Mr. Tomey: Does my hon. Friend agree that the guaranteed price system, which was in operation for years before we entered the Common Market, would have been more advantageous to the milk producer than tagging along behind and accepting this stupid common agricultural policy into which the Tory Party took us?

Mr. Bishop: I note my hon. Friend's comments on that matter. In any changes affecting milk in the Community we want to reserve those aspects that have served this country very well over the years.

Mr. Bulmer: asked the Minister of Agriculture, Fisheries and Food whether he has considered means other than price for helping milk producers.

Mr. Bishop: Milk producers do benefit from the existing measures to assist farmers, notably capital grants, the disease eradication programmes and the advice of the Agricultural Development and Advisory Service. As indicated in the White Paper, "Food from our own Resources", we are prepared to consider whether there are further measures which it would be right and practical to take in furtherance of the Government's policy objectives.

Mr. Bulmer: In the light of Shelter's research into the agricultural tied house, which has shown that those who are promoting its abolition are both ignorant and unrepresentative of the farming community, will the Minister withdraw any support for a policy which is wholly damaging to the dairy industry?

Mr. Bishop: The hon. Gentleman will be aware of the consultative document which was issued some months ago. Consultations with the industry ended in October. The industry's submissions are being considered. We have also made it


clear that we do not want any changes likely to be harmful to the industry. At the same time, we want to give farm workers the kind of security which others enjoy and to which they are entitled.

Mr. Tomlinson: Does my hon. Friend agree that in the action taken in recent years, particularly the recent announcement made by his right hon. Friend, dairy farmers have been protected more against cuts in their real living standards than the vast majority of ordinary working people?

Mr. Bishop: I appreciate my hon. Friend's comments. There have been continuing reviews of these problems and we have been responsive and sentitive to them. Changes which have been brought about between annual reviews have given the industry the kind of support that it needed.

Mr. Peter Morrison: asked the Minister of Agriculture, Fisheries and Food what alternative employment has been provided for creamery workers now that the supply of milk to these factories has been substantially reduced.

Mr. Bishop: I understand that manufacturers of dairy products are making every effort to retain as many workers as possible. The provision for alternative employment opportunities is a question for my right hon. Friend the Secretary of State for Employment.

Mr. Morrison: Is the hon. Gentleman aware that there is agreement on both sides of the House that something must be done to reduce the level of unemployment? Does he accept that those who are made redundant in the countryside find it virtually impossible to obtain other work? Does he also accept that his answers earlier today will give those without jobs in the countryside absolutely no encouragement at all?

Mr. Bishop: I appreciate the hon. Gentleman's concern. The situation varies in different parts of the country. My right hon. Friend has been in touch about this matter with the workers, the trade unions and the manufacturers in the industry. I am satisfied that employers have done their best to keep redundancies to a minimum. However, I feel sure that the recent announcement

about guarantees for milk will help to bring about an upturn in milk production and thereby eliminate this problem.

Central Veterinary Laboratory, Weybridge

Mr. Pattie: asked the Minister of Agriculture, Fisheries and Food if he will pay an official visit to the central veterinary laboratories at Weybridge.

Mr. Strang: My right hon. Friend is not and nor am I planning to make such a visit in the near future. However, I did visit the Central Veterinary Laboratory early this year.

Mr. Pattie: During his visit, did the Minister notice the extremely inadequate safety standards at the Laboratories? Is he aware that in recent years there have been nine cases of brucellosis being contracted by members of the staff? Is he also aware that as recently as this summer members of the staff risked their own funds to go to the High Court and that the Ministry had no alternative but to admit liability? Why is it that at the Weybridge laboratories the most dangerous work is carried out in the oldest and the most non-purpose building? When will some specially constructed safety equipment be installed?

Mr. Strang: The figure cited by the hon. Gentleman is not the one that I have, but I will check it. The hon. Gentleman has made some very sweeping allegations relating to safety precautions at the laboratories. I cannot answer his specific allegations, but I undertake to see that they are examined. We have received no evidence which in any way shakes our confidence in the director and chief veterinary officer at the laboratories.

Mr. Wiggin: Is it not a fact that the State veterinary service has for too long been in great disarray, that it has been underpaid and under recruited and that its average age is grossly too high? Will the Minister tell us why, after nearly two years in office, he has done nothing about it?

Mr. Strang: How ignorant can the hon. Gentleman get? Is he not aware of the enormous transformation that we are achieving in the State veterinary service?

Mr. Wiggin: Tell us about it.

Mr. Strang: I will tell the hon. Gentleman what has happened. We have enormously increased recruiting and massively increased salaries. We took over a service that was in a disgraceful state. These are the facts, as the hon. Gentleman knows.

Mr. Pattie: In view of the unsatisfactory nature of that reply, I beg to ask leave to give notice that I shall raise the matter on the Adjournment at the earliest opportunity.

Apples

Mr. Wakeham: asked the Minister of Agriculture, Fisheries and Food what measures have been taken to protect United Kingdom fruit farmers from imports of apples from EEC countries at prices which undercut home producers.

Mr. Strang: During the transitional period United Kingdom apple growers benefit from annually decreasing charges on imports under the accession compensatory amount arrangements, which were designed to align our prices gradually with the lower levels in the original Community.

Mr. Wakeham: Does that mean that when apples are dumped on the English market, makeshift or jerry-built arrangements will have to be made to protect our growers?

Mr. Strang: The hon. Gentleman must accept that we are now part of the Community apple market—

Mr. Torney: Unfortunately.

Mr. Strang: —and that any structural surpluses must be tackled on a Community basis.

Mr. MacFarquhar: In view of the laudable sentiments evinced by my hon. Friend earlier when referring to the apple mountain, will he undertake to take some practical steps to investigate whether it will be possible to get hold of some of these apples for people in this country? Many housewives in Belper are appalled by the destruction of these apples when they are having to pay high prices.

Mr. Strang: My hon. Friend has made a fair comment. We have to discriminate between a structural and an acceptable surplus of apples. We must appreciate that when we have self-sufficiency in a

commodity it means that, for seasonal reasons, sometimes we shall have too little and at other times too much. I take my hon. Friend's point about the destruction of food.

Dutch Elm Disease

Mr. Cope: asked the Minister of Agriculture, Fisheries and Food what measures have been taken to ensure a market for timber felled as a result of Dutch elm disease.

Mr. Strang: Proposals for extending the market for timber felled as a result of Dutch elm disease are under active consideration. We hope to make an announcement in a few days.

Mr. Cope: Is the Minister aware that the Forestry Commission has today published a report on the progress of the disease, which amounts in some countries almost to the death certificate of the English elm? Does he agree that we must try to get the best out of this national disaster by using the timber? Is the hon. Gentleman aware that in the first nine months of this year we imported £250 million worth of timber, even though the timber market is in the doldrums? Is the hon. Gentleman aware that as many as 5½ million trees will be rotting in the ground?

Mr. Strang: I am glad that the hon. Gentleman has mentioned the report of the Forestry Commission, which came out today. I accept the substance of what the hon. Gentleman said, but I am sure that he will understand that there are considerable difficulties in placing additional elm in an already depressed market. We are having discussions to see how we can best proceed.

Mr. Woodall: Will my hon. Friend consider making approaches to his right hon. Friend the Secretary of State for the Environment with a view to recompensing local authorities, which are having to dispose of trees suffering from this disease when the owner of the property concerned cannot do so himself?

Mr. Strang: My hon. Friend is right in that many local authorities, to their credit, are now taking on this responsibility. I am sure that my hon. Friend would not expect me to give any commitment involving additional public expenditure at this stage.

Mr. Charles Morrison: Is the hon. Gentleman aware that the yards of many timber merchants in Wiltshire and Somerset are already over-full with elm? Is he aware that they cannot cut down any more because they have not the space for the trees? Does he appreciate that this has happened because the market seems to have disappeared? Has the Minister heard that it is being rumoured that the market has disappeared not least because the National Coal Board has stopped purchasing elm? Will he give an undertaking that all statutory bodies and nationalised industries will be given every encouragement to purchase elm timber as and when possible?

Mr. Strang: I am happy to give the hon. Gentleman that undertaking. As he has acknowledged, this is a difficult problem. Indeed, it is a national catastrophe.

Dr. M. S. Miller: Is my hon. Friend aware that this disease has no racial connotations in that it has reached the Glasgow district? Is my hon. Friend satisfied that sufficient steps are being taken to continue all attempts to eradicate the disease, especially as it is moving so far north?

Mr. Strang: Yes, I agree with my hon. Friend. The disease is moving north, although the really serious damage is being done in the southern part of the country. We are anxious to take all possible steps to prevent the disease from moving even further north.

Oral Answers to Questions — TUC, CBI AND NEDC

Mr. Gould: asked the Prime Minister when he next expects to meet the leaders of the TUC.

Mr. Watkinson: asked the Prime Minister when he next plans to meet the TUC.

Mr. Ashley: asked the Prime Minister when he next proposes to meet the TUC and the CBI.

Mr. Molloy: asked the Prime Minister when he next expects to meet the TUC and the CBI.

The Prime Minister (Mr. Harold Wilson): I shall be meeting representatives of the TUC later today to hear

their views on the issues which will be discussed at the meeting of Heads of State and Governments on the international economic situation in Paris on 15th November. I had a similar meeting with the CBI on Monday and as the House knows, I shall be meeting both the TUC and the CBI when I take the chair at the next meeting of NEDC of 5th November.

Mr. Gould: Will my right hon. Friend suggest to the TUC leaders when he meets them that they could learn a good deal about the reasons for our current economic difficulties from a close study of the operations of Slater Walker? Does he agree that the Conservative Party might also learn from such a study, and that it might conclude it would be better employed in supporting the Government's efforts to promote genuine investment and productive industry than proclaiming the supposed virtues of the squalid, unproductive and irresponsible profit taking which is practised by its own high priests?

The Prime Minister: As far as I understand it, having studied what my hon. Friend has said, neither Mr. Slater nor the right hon. Member for Worcester (Mr. Walker) is a member of the TUC.

Mr. Ashley: Is my right hon. Friend aware that the TUC is far more interested in the general level of public expenditure than in financial whizz kids, and that it is eagerly awaiting with bated breath the massive shopping list of public expenditure cuts that will be handed to my right hon. Friend shortly by the Leader of the Opposition? In view of the right hon. Lady's recent speeches, does my right hon. Friend agree that when she publishes her massive shopping list of public expenditure cuts she will make a significant contribution to a basic human right that she has enthusiastically propounded—namely, the right to be unequal?

The Prime Minister: There is not a great deal of ministerial responsibility or any other kind of responsibility so far as these pledges are concerned. I have made inquiries—I do not know whether it is due to postal delays or some other cause—but I have not seen the list to which my hon. Friend refers.

Mr. Hordern: Bearing in mind the right hon. Gentleman's talks with the


TUC, will he confirm that it remains the Government's intention to reduce public expenditure by £1,200 million next year?

The Prime Minister: The figure announced by my right hon. Friend in the Budget for the 1976–77 expenditure year remains the policy of Her Majesty's Government. I think that the hon. Gentleman will confirm that the figure announced in the Budget was slightly smaller, but that is the Government's policy.

Mr. Molloy: Will my right hon. Friend tell the House, notwithstandng the curious ailment that afflicts some Conservative Members who want public expenditure cuts, except in their own constituencies, where they want an increase, what representations have been made to him by the CBI, the TUC and the Leader of the Opposition for cuts in public expenditure generally and the National Health Service in particular?

The Prime Minister: I suppose that question arises out of my hon. Friend's reference to ailments. I have had, as have other Ministers appearing at this Dispatch Box, demands from Conservative Members for vastly increased expenditure. I have had no specific propositions for reductions in expenditure from the Opposition, apart from some ideological preoccupation with nationalisation, where there is no addition to expenditure in real resources, and the proposals of the right hon. Lady the Leader of the Opposition in respect of food and housing subsidies, which would merely increase the cost-of-living index and make more difficult the acceptance by the country of the counter-inflation policy on wages, about which the right hon. Lady could not even vote.

Mrs. Thatcher: When the Prime Minister sees the TUC today, or at any other time, will he point out that, according to his right hon. Friend the Chancellor of the Exchequer, the Government will be borrowing even more next year than this year and that a large part of the cost of that borrowing will have to be borne out of the pay packets of its members?

The Prime Minister: If it is so necessary to answer that question, my reply is "Yes, Sir", but every member of the TUC heard my right hon. Friend explain

these matters with great courage at the Labour Party Conference, and this was fully understood there. We did not have a similar degree of courage from the right hon. Lady when she addressed her own conference.

Oral Answers to Questions — WEST OF SCOTLAND

Mr Rifkind: asked the Prime Minister whether he will pay an official visit to the West of Scotland.

The Prime Minister: I refer the hon. Member to the reply which I gave to the hon. Member for Glasgow, Cathcart (Mr. Taylor) on 28th October, Sir.

Mr. Rifkind: Is the Prime Minister aware that the Chrysler Linwood factory, which provides 6,500 jobs, is in the West of Scotland? Is he further aware that throughout the United Kingdom more than 25,000 jobs might be put in jeopardy if Chrysler decided to move out of the United Kingdom? Will he inform the House what representations the Government are making to try to prevent what would be, on any calculation, a devastating blow to employment prospects if the company were to move out?

The Prime Minister: The hon. Gentleman has not exaggerated the seriousness of any possible move of that kind. It has been known for some time that the financial situation of Chrysler (UK) has been causing anxiety. The Government, including myself, in meetings with the Detroit heads, have been in continual touch with the corporation, and we were given assurances by the corporation in line with the assurances previously given on the occasion of the merger with Rootes in 1968. My right hon. Friend the Secretary of State for Industry has written to Mr. Riccardo, Chairman of the Chrysler Corporation, asking for a full appraisal of the situation. I understand that the corporation had in any event intended to have discussion with my right hon. Friend in the very near future. I have informed myself very fully of the situation so far as the discussions with Chrysler are concerned. No decision has been taken. I can give the House an assurance that my right hon. Friend the Secretary of State for Industry and I would expect to meet the corporation before any decision affecting Chrysler


(UK) was taken. I can give the House the firm assurance that at this stage it is too early to speculate as to what that decision might be.

Mr. Les Huckfield: May I, on behalf of my constituents, thank my right hon. Friend for the reply that he has just given? Is he aware that to those who represent other constituencies, apart from those in Scotland, the announcement by the Chairman of Chrysler Corporation also represents a serious situation? Does he agree that this is a complex situation, including the factors of model ranges, market capacity, and a whole range of other problems? Is he able to give the House more information about the undertaking that he personally was given in connection with the Chrysler Corporation when he visited America earlier this year?

The Prime Minister: As far as I am aware, no decision has been announced. I think that some phrases have been used in the United States, but I do not regard them as a decision and I have confirmed that that is true equally of Chrysler International.
I agree with my hon. Friend. There are many problems here with model ranges and so on. Concerned as he and I are with his constituents and with those of the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) and others, let me say in reply that this afternoon my right hon. Friend the Secretary of State for Industry will be meeting a number of my hon. Friends who are involved with Chrysler, and he wanted me to say particularly that if any hon. Member in any part of the House wishes to have a meeting with him about the anxieties over Chrysler, he will be glad to arrange that at the earliest possible moment.
There are other problems, and my hon. Friend is aware of these from his constituency, as is the hon. Member for Pentlands. There is also the question, from the point of view of our exports, of the enormous programme of shipments to Iran from Chrysler (UK) Limited, and in anything that is discussed we shall all be concerned with maintaining that flow of exports.

Mr. Buchan: rose—

Mr. Speaker: The next Question is No. 4.

Mr. Buchan: On a point of order, Mr. Speaker. As mine is the constituency under discussion, I had hoped to be called to ask a question.

Mr. Speaker: If the hon. Member bides his time, he may get a chance to do so.

Oral Answers to Questions — STATE OF THE NATION

Mr. Norman Lamont: asked the Prime Minister whether he will make a ministerial broadcast on the state of the nation.

Mr. Blaker: asked the Prime Minister whether he will make a ministerial broadcast about the state of the nation.

Mr. George Gardiner: asked the Prime Minister if he will make a ministerial broadcast on the state of the nation.

Mr. Peter Morrison: asked the Prime Minister whether he will make a ministerial broadcast on the state of the nation.

The Prime Minister: When I think it appropriate to do so, Sir.

Mr. Lamont: Will the Prime Minister take an early opportunity to explain the inexplicable—the Government's attitude to public spending? Has he seen the warning, recently given by certain eminent economists, that unless public spending is cut there will not be enough cash to finance any revival of industrial activity, and unemployment will therefore rise still further? Is he aware that every time the Chancellor of the Exchequer's gramophone needle gets stuck and he says that cuts in public spending mean higher unemployment, that only confirms the impression that he does not know what he is doing?

The Prime Minister: Every time the Conservative needle gets stuck it is at the point just before the Opposition tell us what cuts they would make. My first point on this is to refer to the way in which for three and a half years members of the present Opposition cheered every challenge to the Leader of the Opposition by the then Prime Minister, and then to challenge them to tell us whether they would, for a start, cut the financial resources of the National Health Service. When I get an answer on that from the


right hon. Lady I shall begin to take Opposition Members seriously.

Mr. Buchan: I welcome the solicitude of all hon. Members for my constituency and the assurance given by my right hon. Friend about the discussions that are taking place between Members and the Secretary of State this afternoon. May I make this simple point—[HON. MEMBERS: "No."] May I ask my right hon. Friend whether he is aware that the town of Linwood in my constituency depends entirely upon the continuation of Chrysler in Britain and that we should be faced with a mini-Jarrow if anything went wrong? If money were not forthcoming from the Government, or from other sources, would my right hon. Friend accept that the state of this nation would impel us to take other means of dealing with the Chrysler multinational company in this country in pursuance of the undertakings that we have been given?
I suggest that if the money that we seek—[Interruption.]

Mr. Speaker: Order. Will hon. Members please keep quiet? It is for me to decide whether the hon. Member is out of order.

Mr. Buchan: Does my right hon. Friend agree that if the money that we seek this afternoon does not come forward in support of the Chrysler Corporation, the Government will have to adopt other measures to deal with the situation, not stopping short of nationalising it?

The Prime Minister: I am glad to have from my hon. Friend a really serious and important question affecting the livelihood of many thousands of workers. The reaction of the Conservative Party to that question was, of course, typical. I have said in answer to an earlier question today that we are trying to get a full appraisal of this situation: my right hon. Friend has asked for it. I have asked for, and I think I am in a position to say that I have received, an assurance that no irrevocable decision will be taken before there is a possibility of my right hon. Friend and myself discussing with the heads of the Chrysler Corporation the whole situation, the appraisal and any possibilities which it or anyone else may have for solving this problem. It is very difficulty. I would not want to under-rate its gravity today.

Mr. Blaker: Would it not help the people to understand the causes of our present economic situation if the Prime Minister were to give a talk about the merits of public ownership as demonstrated by results in this and other countries? Could he not explain, for example, how it is that the Soviet Union, which has nearly a third of its work force engaged in agriculture and vast areas of farmable land, is constantly having to buy large quantities of wheat from the United States, only 4 per cent. of whose population is so engaged?

The Prime Minister: There is no ministerial responsibility for these international grain situations, or any comparisons with this country. However, the hon. Member, who, I know, is one of the most fair-minded Members—he would, I am sure, wish to study the record over the years—will know that, as Lord McGowan said, if we had not nationalised coal, we should have had a total coal famine in this country year after year. I am sure that the hon. Gentleman will wish to applaud—he voted for the decision of the Government of which the right hon. Member for Finchley (Mrs. Thatcher) was a member, and she has not dissociated on this matter, so far as I know—the success of Rolls-Royce engines under public ownership, under nationalisation proposals carried through by the Conservative Government.

Mr. Cant: Returning to the general economic state of the nation, what importance does my right hon. Friend attach to the growing propensity to save among the higher income groups, with the result that 13½ per cent. of disposable income is being saved? Does he feel that he should send out to the nation a clear message that everyone who is embarking on this saving binge should buy a car and buy a house in order to raise aggregate demand and reduce unemployment?

The Prime Minister: Knowing the expertise of my hon. Friend, but not knowing the figures that he has quoted, I naturally defer to his great knowledge of these matters. I am sure that he would understand if I were to ask for a little time to study his figures or, better still, to ask the Chancellor of the Exchequer to do so.

Mr. Gardiner: Will the Prime Minister recognise that, in the national interest, he


cannot go on ducking the question put to him by my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont)? Although we recognise that it is very hard for him to enlighten the nation on these matters when the Chancellor of the Exchequer is himself in the dark, would he tell us why we have not yet received the full promised statement from the Chancellor on the Government's spending programme and the level of the public sector borrowing requirement, and when we shall get it?

The Prime Minister: The statement referred to by my right hon. Friend was made, as I said it would be made, at the Mansion House, and he has answered many questions about it here. However, if the hon. Member is concerned with the actual figures for the PSBR, as I understand him to be, they rose from minus £4 billion to £6,325 billion, a turnaround of £10,325 billion, under the Conservative Government.

Mr. Cyril Smith: rose—

Hon. Members: How long?

Mr. Speaker: Order. There are still one or two hon. Members with Questions linked to this one.

Mr. Smith: When the Prime Minister makes a ministerial broadcast on the state of the nation, would he particularly deal with two aspects—first, the fact that already, much as we are concerned about Chrysler, more than 25,000 people in the textile industry have lost their jobs, and what he proposes to do about it; secondly what the Government's post-August 1976 policy on incomes will be?

The Prime Minister: In my answer to the previous question I said "billions" when I should have said "millions". On the first question by the hon. Member for Rochdale (Mr. Smith); he is absolutely right. Hon. Members of all parties have pressed this on the Government. We have made it clear that, although we do not believe in the introduction of general import controls for balance-of-payments reasons, or other broad economic reasons, we are closely examining certain industries. The hon. Member will have seen a very important statement made by the Secretary of State for Trade in the last 24 hours on this question. I cannot say more on this question.

Mr. Atkinson: Would my right hon. Friend accept that his recent answer about Chrysler now makes it imperative that he concedes to the TUC leaders their request for the introduction of import controls? Will he not accept that the introduction of such controls would be a contribution towards raising the level of world trade and the recovery of employment in this country? Would he not therefore agree that if we are, as a party, moving towards a planned economy, it would be contradictory to omit something like £20,000 million-worth of trade from that planned economy?

The Prime Minister: I have said that my right hon. Friends and I are meeting the TUC this afternoon to hear its views—as the CBI gave its views—on what particular lines we should be taking at the forthcoming Heads of Government economic meeting. I would not automatically accept from my hon. Friend that swingeing and sweeping and generalised import cuts would automatically, as he hopes, increase the level of world trade. All past experience suggests that they would reduce it.
He has referred to motor cars—Chrysler and so on—in this context. All leaders of the motor car industry—I am speaking only of that industry since he referred to it—believe that to introduce import restrictions on motor cars would lead to a fall in motor car production because of the effect on our exports and, indeed, because of the remarkable record in exports by the British motor car industry over the last month or two.

Mr. Morrison: Is the right hon. Gentleman aware that the nation expects him, as Prime Minister, to answer and not avoid questions, as he has done today? Does he or does he not agree that he and his Government have borrowed about £175 on behalf of every man, woman and child this year? If that is so, does he not think it right to tell the nation that that is so?

The Prime Minister: The problem of PSBR has been much discussed in the House and no doubt will be again when we come to the debate on the Gracious Speech. It is clear that it can be reduced only by increased taxation, which I do not think the Conservative Members are proposing, or by cuts in Government


expenditure. But not only the Government have a duty here: the so-called alternative Government have a duty, too. We have not had one whisper out of them about how to save Government expenditure.

Mr. Faulds: As the Prime Minister has at last set his feet on the road to Mecca and as he has made no statement to the House about the agreement with the Saudi Arabian Government, which is so crucial to our economic well-being, would it not be advisable to include this matter in his next Prime Ministerial broadcast, whenever it may be, so that people can get to know the tremendous opportunities under a number of headings that that agreement presents to Britain?

The Prime Minister: I agree about the opportunities presented by the successful discussion we had with the Saudi Arabian Government last week. On Middle East policy generally, it may be a disappointment to my hon. Friend, but the position described to the House by the Foreign Secretary and myself has not changed in any way on these matters. Incidentally, if I were ever to set out on the road to Mecca, I am not sure that I would go along with my hon. Friend on that pilgrimage.

Mr. Peyton: If the Prime Minister does decide to intrude upon the nation's entertainment time, perhaps he would steel himself to the really unpalatable and answer the question relating to the borrowing power which my hon. Friend the Member for Chester (Mr. Morrison) asked him just now: does he or does he not see dangers for the nation in this indefinite practice of attempting to borrow our way out of trouble?

The Prime Minister: To answer that question properly would intrude for more than the 14 minutes during which I have intruded into the time of public business. This matter has been fully debated in the House. [HON. MEMBERS: "Answer."] My right hon. Friend and I have repeatedly said in economic debates in the House and elsewhere that the size of the public sector borrowing requirement is a matter of considerable anxiety. My right hon. Friend has described to the House the very painful cuts which have been made in the coming year's expenditure,

out of which the Opposition will seek to make the most political advantage—[HON. MEMBERS: "Oh."] Oh yes, they will—and local authorities—everyone. The whole thing will come out. I should like the right hon. Lady the Leader of the Opposition to repudiate it when they do.
I have said, because successive Governments have found this to be a fact, that a decision on the right level of expenditure on public sector borrowing requirements is best taken two or three years ahead. We are doing it in relation to the PESC discussions, as they have been known to successive Governments. The results will be made known to the House at the proper time.

BUSINESS OF THE HOUSE

Mrs. Thatcher: May I ask the Leader of the House to tell us the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): Yes, Sir. The business for next week will be as follows.
MONDAY 3RD NOVEMBER—Debate, until about 7.30 p.m., on the First Report of the Select Committee on Procedure, Session 1974–75, on European Secondary Legislation.
Thereafter, until 11.30 p.m. debate on the Report of the Renton Committee on the Preparation of Legislation, Command No. 6053.
TUESDAY 4TH NOVEMBER—Motion on the Northern Ireland (Emergency Provisions) Act 1973 (Amendment) Order, until about 7 o'clock.
Motions on the Social Security (Contributions, Re-Rating) Order and on the Social Security (Contributions) (Consequential Amendments) Regulations, which may be taken formally to allow a debate on the position of the self-employed, which will arise on a Motion for the Adjournment.
WEDNESDAY 5TH NOVEMBER—Consideration of Lords Amendments to the Petroleum and Submarine Pipe-lines Bill.
Motions on the Road Vehicles Lighting (Amendment) (No. 2) Regulations.
THURSDAY 6TH NOVEMBER—Consideration of any Lords Message on the Trade Union and Labour Relations (Amendment) Bill.
Debate on the Community Budget for 1976 when the relevant 1975 EEC Documents will include R/2145, 2158 and 2228.
FRIDAY 7TH NOVEMBER—Debate on Aid Policy, when Command Paper No. 6270 and EEC Documents S/1239/74, 1310, 406/75 and 407 will be relevant.
Motion on the European Communities (Definition of Treaties) (No. 2) Order.
MONDAY 10TH NOVEMBER—Debate on Foreign Affairs.

Mrs. Thatcher: May I ask the Lord President a question about Thursday's business? He appears to have arranged a debate on the Community Budget after a lengthy day's proceedings, unless the Government propose to accept messages from the other place. If that business does not finish at a reasonable hour, may we have another day for that important debate?

Mr. Short: Certainly I shall watch this point very carefully. Of course we shall not know the position until Monday and until the other place finishes with this matter. I would, in any case, ensure a debate of at least three hours on the Community Budget.

Sir G. de Freitas: Is the Leader of the House aware that many hon. Members, including all members of the Select Committee on Overseas Development, will welcome the general debate on aid policy on Friday? Will he also look to the future and see whether we can have more debates on such general topics as that—more than we have had in the last four or five years?

Mr. Short: I agree very much with that point. I hope that in the coming Session it will be possible to have such debates more often.

Mr. Biffen: Before we are deafened by the chorus of lobbyists from the motor trade on behalf of Chrysler (UK) Limited, may I ask whether an arrangement will be made for an early debate on the Report of the Expenditure Committee on the Government's financing of British

Leyland so ably presented by the hon. Member for Sheffield, Attercliffe (Mr. Duffy)?

Mr. Short: I cannot promise an early debate. As I said last week, the Government are considering this matter and will make their comments on the Report. That will be the time to consider a debate.

Mr. Duffy: Does not my right hon. Friend think that the news about Chrysler is only likely to delay that Government response and, therefore, delay a debate in this House? In view of the anxiety displayed by some hon. Members this afternoon, does he not think that the grounds for such an early debate are a great deal more urgent than they were a fortnight ago? Only he, as Leader of the House, can rescue the House from this "Catch 22" situation.

Mr. Short: I appreciate the concern of my hon. Friend and others about this matter. I have replied to this point before. I do not think that this is the moment to debate Chrysler.
The Government are considering the question of the Report. We shall then consult the chairman of the main Committee, as we always do, about these matters, and if he is agreeable to a debate about the Report, I will arrange it.

Mr. Cyril Smith: Can the right hon. Gentleman indicate how soon the House will again have an opportunity to express its views about broadcasting its proceedings?

Mr. Short: Yes, I hope very soon. There is a sub-committee of the Services Committee considering whether the service should continue. I will present its Report to the House on behalf of the Services Committee at the earliest possible moment.

Mr. Christopher Price: May I draw my right hon. Friend's attention to Early-Day Motion No. 716 on police interview procedures?
[That this House, regarding with deep concern the implications for police interview procedures of Lord Justice Scarman's recent judgment in the Court of Appeal in which he quashed the verdicts of murder, manslaughter and arson on three youths who were convicted three years ago on the evidence of their


confessions alone, urges the Home Secretary to institute an immediate and impartial inquiry into the circumstances, and to bring forward legislation to regulate police interview procedures by law and the admissibility in evidence of statements made during them]
It has now been signed by 124 Members on both sides of the House. May I ask him to urge on his right hon. Friend the Secretary of State for the Home Department that it is very urgent indeed to have a statement on the Floor of the House so that we can have our questions answered by the Home Secretary?

Mr. Short: I will certainly pass that request on to my right hon. Friend the Home Secretary. I am aware of my hon. Friend's concern about this matter, and I have heard his comments about it on the radio and television.

Mr. Hugh Fraser: Would the right hon. Gentleman agree that in view of gross disquiet, official time should soon be found for a debate on terrorism and that such a debate should include a new test of opinion in this House regarding the restoration of the penalty of death for those who are making war on the State and its inhabitants?

Mr. Short: Quite apart from the last point in the right hon. Gentleman's question, I certainly think that his first point is extremely important and I will bear this in mind in the new Session. I cannot promise any time in the remainder of the spill-over, I am afraid.

Mr. Snape: May I draw my right hon. Friend's attention to Early-Day Motion No. 719, signed by about 50 of his hon. Friends, on the subject of cuts in rush hour train services?
[That this House learns with considerable alarm that British Rail intend to cut and restrict their suburban rail services at peak periods, thereby spilling more traffic on to overcrowded roads, causing great inconvenience to thousands of people, increasing the possibility of accidents and further polluting the atmosphere, which seems a terrible way to run a railway; and urges Her Majesty's Government to seek urgent talks with British Rail management with a view to retaining the maximum railway services—particularly when most required at peak periods.]
While I would not ask for any time to debate the Government's transport policy, because the Government have no such policy, may I ask my right hon. Friend whether he agrees that it is important that this House should have an opportunity of discussing transport while British Railways and the National Bus Company are still in existence?

Mr. Short: Without in any way accepting the premise on which that question was based, because it is completely erroneous, I will certainly bear in mind what my hon. Friend said and I will discuss it with my right hon. Friend the Minister for Transport.

Mr. Charles Morrison: Although the right hon. Gentleman may not think that this is the precise moment to debate Chrysler, it seems very likely that we shall have to debate that matter before very long. Would it not be a good idea if a debate on Chrysler were preceded by a debate on the Report of the Select Committee concerning the motor vehicle industry so that Chrysler could be looked at in the context of the motor vehicle industry as a whole?

Mr. Short: I thought that I dealt with that point when it was raised by one of my hon. Friends. As I said, as soon as the Government are ready to make their comments on the Report, I will consult the chairman of the main Committee and see whether we can arrange a debate. I am aware that there is concern on both sides of the House about this matter.

Mr. Madden: As my right hon. Friend the Prime Minister indicated that he is to meet other Heads of Government on 15th November, could the Lord President arrange for a statement to be made on this meeting which will, we expect, occur when Parliament is not sitting?
Second, could my right hon. Friend arrange for a debate before the end of this Session on unemployment and industrial issues, which would allow hon. Members to indicate to the Prime Minister their thinking on matters which should surely be discussed at the summit conference?

Mr. Short: There will be a debate on foreign affairs on Monday week. While the House will not be sitting on the date the hon. Member has mentioned, it will


be sitting again on 19th November. There will be a prolonged debate on the Gracious Speech which will provide opportunities to debate this matter. I will pass on to the Prime Minister my hon. Friend's wish for a statement on the summit conference. I am sure that he would wish to make one anyway.

Mr. Crouch: Can the right hon. Gentleman say something more about Wednesday's business, when we are to discuss the road vehicle lighting amending regulations? Is he satisfied, having listened to the views of both sides of the House, that he is giving enough time to consider this important change in our road safety regulations? Does he not think that this move should be deferred in view of the inadequate time allowed?

Mr. Short: If the debate were deferred the order would come into operation very soon. I have seen both the prayer and the motion on the Order Paper. Hon. Members will have noticed that I referred to "motions". I propose to put down both the prayer and the Early-Day Motion for debate in that period. My right hon. Friend the Minister for Transport appreciates the concern which exists about this. He realises that there are many views. He has discussed this with me and my right hon. Friend the Parliamentary Secretary to the Treasury and has agreed that there should be a free vote on the Government side of the House on the matter so that the House can arrive at a decision.

Mr. William Hamilton: Can my right hon. Friend give an assurance that he will seek to ensure that the House has more time in future to debate Reports of Select Committees? I have particularly in mind the Select Committee which dealt with battered wives and violence in marriage. Since that Committee made a unanimous recommendation that the divorce laws in Scotland should be brought into line with those in England and that that step should be undertaken by the Government, may I ask my right hon. Friend to make representations in the appropriate quarters to ensure that this is contained in the forthcoming Gracious Speech?

Mr. Short: I will pass that suggestion on to the Secretary of State for Scotland. There is a wish, not only on my hon. Friend's part but on the part of many

hon. Members, to deal with this issue of divorce law reform in Scotland. As for the first part of my hon. Friend's question, I understand that some of the evidence to the Committee he mentioned has not yet been published. When it is and when the Government have considered their reply to the Report—as I said in the case of an earlier question relating to the Report on the motor car industry—the Government will publish their report and we shall discuss with the chairman of the Committee the question of a debate. I believe that there is a case for a debate on this matter.

Mr. Sims: Is the right hon. Gentleman aware that more than 12 months have elapsed since the publication of the Younger Report on the treatment of young adult offenders? Is he further aware of the considerable interest in this Report. particularly among probation and after-care officers who would like some indication of Government reaction? Can he undertake that early in the new Session we shall have a debate on this Report?

Mr. Short: I will certainly bear that in mind and do what I can.

Mr. Heffer: Will my right hon. Friend reconsider the answer which he gave to my hon. Friend the Member for Sowerby (Mr. Madden), since unemployment is now the most serious problem facing us? Is he aware that in areas such as Mersey-side there is 10·7 per cent. unemployment, which means 80,000 people unemployed in a concentrated industrial area? Will my right hon. Friend give an assurance that if we cannot debate unemployment before the end of this Session he will set aside one day during the debate on the Gracious Speech to discuss unemployment and nothing else, so that we may get to grips with the problem?

Mr. Short: I appreciate the concern about this. I agree that the level of unemployment is quite intolerable. The question of my hon. Friend the Member for Sowerby (Mr. Madden) was in the context of the summit meeting. I pointed out that there is a debate on foreign affairs when this can be dealt with and that no doubt the Prime Minister will wish to make a statement after the conference. I will certainly bear in mind my hon. Friend's suggestion about a day's debate during the debate on the Address.

Mr. Stokes: When will the Leader of the House find time for the important subject of immigration to be debated since this is a matter which has not been discussed in the House for a long time?

Mr. Short: Not next week.

Mr. Spearing: Will my right hon. Friend confirm that the debate on Monday next on the EEC legislation report will be a debate in principle and that motions relating to the change of standing orders will not be laid on that day?

Mr. Short: I cannot give that undertaking. I made it clear last week that this debate will be based on a number of motions to amend the standing orders in accordance with the recommendations of the Select Committee of which the hon. Member is a member. I feel that this meets the desires of by far the greater number of hon. Members.

Mr. Teddy Taylor: Is the right hon. Gentleman aware that because of mismanagement and delay in the Government's Scottish legislative programme, the Scottish Grand Committee has been deprived of four Estimates debates on general Scottish subjects which we have always had in the past? In view of this, will the right hon. Gentleman say whether he can make any time available for these debates before the end of the Session and, if not, whether we shall get an extra four days early next Session to discuss vital Scottish issues such as rates and jobs?

Mr. Short: The hon. Member bears some responsibility for the debate situation in the Scottish Grand Committee. If he wishes to have further debates in that Committee, I shall be prepared to discuss this with him and his hon. Friends.

Mr. Cryer: May I thank the Leader of the House for giving time to debate the instrument relating to dipped headlights, thus yielding to the pressure of back benchers who tabled a prayer to ensure that this issue was debated? May I point out that one of the threads running through Question time is the issue of import controls, either across the board or of a selective nature? Does he not think that time should be allocated to this important question, linked with the question of unemployment? Could

this not also be linked with the position of the motor car industry? Is it not a matter of some urgency that this sort of economic question should be debated soon?

Mr. Short: I agree about the importance of this subject. I said last week that as soon as the Government are ready to make an announcement on this they will do so. The debate on the Gracious Speech is coming up shortly. It will be a long debate and I have no doubt that part will be devoted to economic matters. Perhaps my hon. Friend will discuss this with me and we will see what we can do.

Mr. Hurd: Can the right hon. Gentleman be more forthcoming about the point originally raised by the Leader of the Opposition concerning the Community Budget? Is he aware that this is a disturbing situation and that now is the time for the House to debate the issue if we are to have any influence on the outcome? Is not a debate of three hours late at night an inadequate way of tackling this important subject?

Mr. Short: It may not be late at night. What I said was that we shall not know until Monday, until the Lords have finished their consideration of the previous business. I shall review the matter after Monday. I gave an interim undertaking to the right hon. Lady that in any case I would guarantee a debate of three hours. We shall look at this after Monday and perhaps discuss it.

Mr. Maxwell-Hyslop: Will the right hon. Gentleman acknowledge that the pressure for debates on important matters which simply cannot wait, such as issues on which Select Committees have spent days and nights, is incompatible with the sort of legislative programme we have had this Session? Does he agree that if he wants to do more than make nice noises and intends to grant the House the right to debate important issues, we cannot have the same sort of volume of legislation next Session? Will the right hon. Gentleman please arrange for either the Secretary of State for Industry or a Treasury Minister to clarify the position following the speech of the Chief Secretary to the Treasury, reported during the last recess, in which he implied that there was no money left in the till to rescue


further industries under Sections 7 and 8 of the Industry Act? Is he aware that this relates to the Chrysler situation, among others?

Mr. Short: The last question was dealt with by the Prime Minister today. As for the Select Committee point, the practice being followed by the Government is precisely the same as that followed by previous Governments. There is no change. The Government consider a Report, make their reply and discuss with the chairman of the main Committee what subjects should be discussed in the House.

Mr. Michael Latham: Is the right hon. Gentleman aware of the growing concern of our constituents over the level of public sector manpower? Is he aware that the Civil Service under his Government has increased by 11,000 and that between March and June of this year there has been an increase of 26,000 in local government staff? Should not this be debated in the House next week?

Mr. Short: That is the kind of subject which could be raised in the debates on the Queen's Speech.

Mr. Peyton: May I take the right hon. Gentleman back to the affair of the "Eagle"? He will remember that his right hon. Friend the Secretary of State for Employment remarked during the currency of the dispute that we should get the dispute settled and then discuss the principles. When shall we get down to the discussion of those principles, which are important matters touching on the rights and liberties of the subject?
In reply to my hon. Friend the Member for Oswestry (Mr. Biffen) and others the right hon. Gentleman said that the debate on the British Leyland financial report would have to await the readiness of the Government to answer that report. Will the Leader of the House do all he can to accelerate the readiness of the Government? This can be rather a costive process.

Mr. Short: I will do all I can to expedite the Government's consideration of the British Leyland financial report. The right hon. Gentleman knows how many days are devoted to debating Reports of Select Committees, and the procedure for choosing subjects. We adopt exactly the

same procedure as was followed by our predecessors. I certainly recognise the great importance of the subject.
I have no doubt that my right hon. Friend the Secretary of State for Employment will pay attention to what the right hon. Gentleman said about the "Eagle" dispute. I shall certainly remind him of his promise.

Mr. Stephen Ross: Is the Leader of the House aware of the large number of amendments made in the other House to the Community Land Bill? May we have his assurance that there will be adequate time to discuss those amendments when the Bill returns to this House, presumably in the week after next?

Mr. Short: Yes, Sir, there will be adequate time.

Mr. Nicholas Winterton: In Prime Minister's Question Time the hon. Member for Rochdale (Mr. Smith) raised the subject of unemployment in the textile industry. Will the Leader of the House give an assurance that there will be a further debate on the textile industry early in the next Session, and before the end of this Session will he ensure that the Secretary of State for Trade makes a statement in the House on what he intends to do about the problems in the industry, as the Government have advanced large sums of money to Bangladesh to build a textile mill which will compete with the United Kingdom in a sector where there is already over-capacity?

Mr. Short: I shall bear in mind the two questions raised by the hon. Gentleman.

Mr. Dykes: When will the Government arrange for an early general debate on direct elections to the European Parliament, a matter which has gigantic implications?

Mr. Short: That must await the summit meeting and the statement which I hope the Prime Minister will make to the House. The subject will probably come up at the summit meeting. I understand that the Minister of State, Foreign and Commonwealth Office yesterday made a statement.

Mr. Boscawen: Will the right hon. Gentleman ask the Secretary of State for Trade to explain to the House his


inactivity over many months which has resulted in the shoe manufacturing industry steadily deteriorating so that it is now in a very serious position?

Mr. Short: No, Sir, I shall not ask him to do that. I repeat, when the Government are ready to make a statement on this industry and on the textile industry my right hon. Friend will make a statement to the House.

BRITISH RAIL (SERVICES)

Mr. Raphael Tuck: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 to discuss a specific and important matter that should have urgent consideration, namely,
the proposed imminent cut by British Rail of 40 per cent. of rail traffic during peak hours".
About a month ago I had suspicions that a cut was about to take place in the services of the Watford-Euston DC line and I have had heated correspondence about it both with British Rail and with

my right hon. Friend the Secretary of State for the Environment. Now there has been a general leak.
I refer you, Mr. Speaker, to Early-Day Motion No. 719, signed by 44 of my hon. Friends, which looks with alarm at British Rail's proposals. The matter is specific in limine. It is important because, quite apart from the loss of jobs the cuts will entail, the rail services are already heavily used and overcrowded and, if the cuts are made, it will be necessary to push the passengers into the trains with bulldozers.

Mr. Speaker: I am grateful to the hon. Member for giving me notice of the application and for sending me a copy of what he intended to say.
I have considered the matter carefully, and also listened to the exchanges which took place today. Without doubt, this is an important matter, but the hon. Member must find other ways of pursuing it in the House. I am sorry, I cannot grant the application under Standing Order No. 9.

EMPLOYMENT PROTECTION BILL

Division List Nos. 376 to 377

[See col. 1684]

Division No. 374.]
AYES
[7.20 p.m.


Adley, Robert
Grimond, Rt Hon J.
Nott, John


Aitken, Jonathan
Grist, Ian
Oppenheim, Mrs Sally


Alison, Michael
Grylls, Michael
Page, John (Harrow West)


Amery, Rt Hon Julian
Hall, Sir John
Page, Rt Hon R. Graham (Crosby)


Arnold, Tom
Hall-Davis, A. G. F.
Pardoe, John


Atkins, Rt Hon H. (Spelthorne)
Hamilton, Michael (Salisbury)
Pattie, Geoffrey


Awdry, Daniel
Hampson, Dr Keith
Penhaligon, David


Banks, Robert
Hannam, John
Percival, Ian


Beith, A. J.
Harrison, Col Sir Harwood (Eye)
Pink, R. Bonner


Bell, Ronald
Harvie Anderson, Rt Hon Miss
Price, David (Eastleigh)


Bennett, Sir Frederic (Torbay)
Hawkins, Paul
Raison, Timothy


Biffen, John
Hayhoe, Barney
Rathbone, Tim


Blaker, Peter
Hicks, Robert
Rees, Peter (Dover &amp; Deal)


Boscawen, Hon Robert
Higgins, Terence L.
Rees-Davies, W. R.


Bottomley, Peter
Hooson, Emlyn
Renton, Rt Hon Sir D. (Hunts)


Boyson, Dr Rhodes (Brent)
Howell, David (Guildford)
Renton, Tim (Mid-Sussex)


Braine, Sir Bernard
Howells, Geraint (Cardigan)
Rhys Williams, Sir Brandon


Brittan, Leon
Hurd, Douglas
Ridley, Hon Nicholas


Brotherton, Michael
Irvine, Bryant Godman (Rye)
Rifkind, Malcolm


Brown, Sir Edward (Bath)
Irving, Charles (Cheltenham)
Rippon, Rt Hon Geoffrey


Buchanan-Smith, Alick
James, David
Roberts, Wyn (Conway)


Buck, Antony
Jenkin, Rt Hn P. (Wanst'd &amp; W'df'd)
Rodgers, Sir John (Sevenoaks)


Budgen, Nick
Jessel, Toby
Ross, Stephen (Isle of Wight)


Bulmer, Esmond
Johnson Smith, G. (E Grinstead)
Rost, Peter (SE Derbyshire)


Carlisle, Mark
Jopling, Michael
Royle, Sir Anthony


Carr, Rt Hon Robert
Kershaw, Anthony
Sainsbury, Tim


Chalker, Mrs Lynda
Kimball, Marcus
Scott, Nicholas


Channon, Paul
King, Evelyn (South Dorset)
Shaw, Giles (pudsey)


Churchill, W. S.
King, Tom (Bridgwater)
Shaw, Michael (Scarborough)


Clark, Alan (Plymouth, Sutton)
Knight, Mrs Jill
Shelton, William (Streatham)


Cockcroft, John
Knox, David
Shepherd, Colin


Cooke, Robert (Bristol W)
Lamont, Norman
Shersby, Michael


Cope, John
Lane, David
Silvester, Fred


Cormack, Patrick
Langford-Holt, Sir John
Sims, Roger


Crouch, David
Lawrence, Ivan
Sinclair, Sir George


Crowder, F. P.
Lawson, Nigel
Skeet, T. H. H.


Davies, Rt Hon J. (Knutsford)
Le Marchant, Spencer
Smith, Cyril (Rochdale)


Dodsworth, Geoffrey
Lester, Jim (Beeston)
Speed, Keith


Douglas-Hamilton, Lord James
Lewis, Kenneth (Rutland)
Spicer, Jim (W Dorset)


Drayson, Burnaby
Lloyd, Ian
Spicer, Michael (S. Worcester)


du Cann, Rt Hon Edward
Loveridge, John
Sproat, Iain


Durant, Tony
McAdden, Sir Stephen
Stainton, Keith


Dykes, Hugh
McCrindle, Robert
Stanbrook, Ivor


Eden, Rt Hon Sir John
Macfarlane, Neil
Steel, David (Roxburgh)


Edwards, Nicholas (Pembroke)
MacGregor, John
Steen, Anthony (Wavertree)


Elliott, Sir William
Macmillan, Rt Hon M- (Farnham)
Stewart, Ian (Hitchin)


Emery, Peter
McNair-Wilson, M. (Newbury)
Stokes, John


Eyre, Reginald
McNair-Wilson, P. (New Forest)
Stradling Thomas, J.


Fairbairn, Nicholas
Madel, David
Tapsell, Peter


Fairgrieve, Russell
Mates, Michael
Taylor, Teddy (Cathcart)


Farr, John
Mather, Carol
Tebbit, Norman


Fell, Anthony
Maude, Angus
Temple-Morris, Peter


Finsberg, Geoffrey
Mawby, Ray
Thomas, Rt Hon P. (Hendon S)


Fisher, Sir Nigel
Maxwell-Hyslop, Robin
Thorpe, Rt Hon Jeremy (N Devon)


Fletcher-Cooks, Charles
Mayhew, Patrick
Townsend, Cyril D.


Fookes, Miss Janet
Meyer, Sir Anthony
Trotter, Neville


Fowler, Norman (Sutton C'f'd)
Miller, Hal (Bromsgrove)
Tugendhat, Christopher


Fox, Marcus
Mills, Peter
Vaughan, Dr Gerard


Fraser, Rt Hon H. (Stafford &amp; St)
Mitchell, David (Basingstoke)
Viggers, Peter


Freud, Clement
Moate, Roger
Wainwright, Richard (Colne V)


Fry, Peter
Montgomery, Fergus
Walder, David (Clitheroe)


Gardiner, George (Reigate)
More, Jasper (Ludlow)
Wall, Patrick


Gardner, Edward (S Fylde)
Morgan, Geraint
Weatherill, Bernard


Gilmour, Rt Hon Ian (Chesham)
Morgan-Giles, Rear-Admiral
Wiggin, Jerry


Glyn, Dr Alan
Morris, Michael (Northampton S)
Winterton, Nicholas


Goodhart, Philip
Morrison, Charles (Devizes)
Wood, Rt Hon Richard


Goodlad, Alastair
Morrison, Hon Peter (Chester)
Young, Sir G. (Ealing, Acton)


Gorst, John
Mudd, David
Younger, Hon George


Gow, Ian (Eastbourne)
Neave, Airey



Gower, Sir Raymond (Barry)
Nelson, Anthony
TELLERS FOR THE AYES


Gray, Hamish
Neubert, Michael
Mr. Richard Luce and



Newton, Tony
Mr. Michael Roberts.




NOES


Allaun, Frank
Armstrong, Ernest
Atkinson, Norman


Anderson, Donald
Atkins, Ronald (Preston N)
Bagier, Gordon A. T.

Bain, Mrs Margaret
Grant, John (Islington C)
Ogden, Eric


Barnett, Guy (Greenwich)
Grocott, Bruce
O'Halloran, Michae.


Bates, Alf
Hamilton, James (Bothwell)
O'Malley, Rt Hon Brian


Bean, R. E.
Harper, Joseph
Orbach, Maurice


Benn, Rt Hon Anthony Wedgwood
Harrison, Walter (Wakefield)
Ovenden, John


Bennett, Andrew (Stockport N)
Hart, Rt Hon Judith
Owen, Dr David


Bidwell, Sydney
Hattersley, Rt Hon Roy
Padley, Walter


Bishop, E. S.
Hatton, Frank
Palmer, Arthur


Blenkinsop, Arthur
Hayman, Mrs. Helene
Park, George


Boardman, H.
Heffer, Eric S.
Parker, John


Booth, Albert
Henderson, Douglas
Parry, Robert


Bottomley, Rt Hon Arthur
Hooley, Frank
Pendry, Tom


Boyden, James (Bish Auck)
Horam, John
Powell, Rt Hon J. Enoch


Bradley, Tom
Howell, Denis (B'ham, Sm H)
Prentice, Rt Hon Reg


Bray, Dr Jeremy
Hoyle, Doug (Nelson)
Prescott, John


Brown, Hugh D. (Provan)
Huckfield, Les
Price, C. (Lewisham W)


Buchanan, Richard
Hughes, Rt Hon C. (Anglesey)
Price, William (Rugby)


Butler, Mrs Joyce (Wood Green)
Hughes, Mark (Durham)
Radice, Giles


Callaghan, Jim (Middleton &amp; P)
Hughes, Robert (Aberdeen N)
Roberts, Albert (Normanton)


Campbell, Ian
Hughes, Roy (Newport)
Roberts, Gwilym (Cannock)


Canavan, Dennis
Hunter, Adam
Robertson, John (Paisley)


Cant, R. B.
Irvine, Rt Hon Sir A. (Edge Hill)
Roderick, Caerwyn


Carmichael, Neil
Irving, Rt Hon S. (Dartford)
Rodgers, George (Chorley)


Carson, John
Jackson, Colin (Brighouse)
Rooker, J. W.


Carter, Ray
Janner, Greville
Roper, John


Carter-Jones, Lewis
Jay, Rt Hon Douglas
Rose, Paul B.


Cartwright, John
Jeger, Mrs Lena
Ross, Rt Hon W. (Kilmarnock)


Castle, Rt Hon Barbara
Jenkins, Hugh (Putney)
Ross, William (Londonderry)


Clemitson, Ivor
Jenkins, Rt Hon Roy (Stechford)
Rowlands, Ted


Cocks, Michael (Bristol S)
John, Brynmor
Sandelson, Neville


Cohen, Stanley
Johnson, Walter (Derby S)
Sedgemore, Brian


Coleman, Donald
Jones, Alec (Rhondda)
Shaw, Arnold (Ilford South)


Colquhoun, Mrs Maureen
Jones, Barry (East Flint)
Sheldon, Robert (Ashton-u-Lyne)


Concannon, J. D.
Jones, Dan (Burnley)
Short, Rt. Hon E. (Newcastle C)


Conlan, Bernard
Judd, Frank
Silkin, Rt Hon John (Deptford)


Cook, Robin F. (Edin C)
Kaufman, Gerald
Sillars, James


Corbett, Robin
Kilroy-Silk, Robert
Skinner, Dennis


Cox, Thomas (Tooting)
Lambie, David
Small, William


Craigen, J. M. (Maryhill)
Lamborn, Harry
Smith, John (N Lanarkshire)


Crawford, Douglas
Lamond, James
Snape, Peter


Crawshaw, Richard
Latham, Arthur (Paddington)
Spearing, Nigel


Crosland, Rt Hon Anthony
Leadbitter, Ted
Spriggs, Leslie


Cryer, Bob
Lestor, Miss Joan (Eton &amp; Slough)
Stallard, A. W.


Cunningham, G. (Islington S)
Lewis, Arthur (Newham N)
Stewart, Donald (Western Isles)


Cunningham, Dr J. (Whiteh)
Lewis, Ron (Carlisle)
Stewart, Rt Hon M. (Fulham)


Dalyell, Tam
Litterick, Tom
Stoddart, David


Davidson, Arthur
Loyden, Eddie
Stott, Roger


Davies, Denzil (Llanelli)
Luard, Evan
Strauss, Rt Hon G. R.


Davis, Clinton (Hackney C)
Lyon, Alexander (York)
Summerskill, Hon Dr Shirley


Deakins, Eric
Lyons, Edward (Bradford W)
Swain, Thomas


Dean, Joseph (Leeds West)
Mabon, Dr J. Dickson
Taylor, Mrs Ann (Bolton W)


de Freitas, Rt Hon Sir Geoffrey
McCartney, Hugh
Thomas, Dafydd (Merioneth)


Delargy, Hugh
MacCormick, Iain
Thomas, Jeffrey (Abertillery)


Dempsey, James
McCusker, H.
Thomas, Ron (Bristol NW)


Doig, Peter
McElhone, Frank
Thompson, George


Douglas-Mann, Bruce
MacFarquhar, Roderick
Thorne, Stan (Preston South)


Duffy, A. E. P.
McGuire, Michael (Ince)
Tierney, Sydney


Dunnett, Jack
Mackenzie, Gregor
Tinn, James


Dunwoody, Mrs Gwyneth
Mackintosh, John P.
Tomlinson, John


Edge, Geoff
Maclennan, Robert
Tomney, Frank


English, Michael
McMillan, Tom (Glasgow C)
Torney, Tom


Ennals, David
Madden, Max
Tuck, Raphael


Evans, Fred (Caerphilly)
Magee, Bryan
Varley, Rt Hon Eric G.


Evans, Gwynfor (Carmarthen)
Mallalieu, J. P. W.
Wainwright, Edwin (Dearne V)


Evans, Ioan (Aberdare)
Marks, Kenneth
Walden, Brian (B'ham, L'dyw'd)


Ewing, Harry (Stirling)
Marquand, David
Walker, Harold (Doncaster)


Faulds, Andrew
Marshall, Dr Edmund (Goole)
Walker, Terry (Kingswood)


Fernyhough, Rt Hon E.
Marshall, Jim (Leicester S)
Ward, Michael


Fitch, Alan (Wigan)
Mason, Rt Hon Roy
Watkins, David


Fitt, Gerard (Belfast W)
Maynard, Miss Joan
Watkinson, John


Flannery, Martin
Meacher, Michael
Watt, Hamish


Fletcher, Raymond (Ilkeston)
Mellish, Rt Hon Robert
Weetch, Ken


Fletcher, Ted (Darlington)
Mendelson, John
Weitzman, David


Foot, Rt Hon Michael
Mikardo, Ian
Wellbeloved, James


Ford, Ben
Millan, Bruce
Welsh, Andrew


Forrester, John
Miller, Dr M. S. (E Kilbride)
White, Frank R. (Bury)


Fraser, John (Lambeth, N'w'd)
Miller, Mrs Millie (Ilford N)
White, James (Pollok)


Freeson, Reginald
Mitchell, R. C. (Soton, Itchen)
Whitehead, Phillip


Garrett, John (Norwich S)
Molloy, William
Wigley, Dafydd


Garrett, W. E. (Wallsend)
Molyneaux, James
Willey, Rt Hon Frederick


George, Bruce
Moonman, Eric
Williams, Alan Lee (Hornch'ch)


Gilbert, Dr John
Morris, Alfred (Wythenshawe)
Williams, W. T. (Warrington)


Ginsburg, David
Morris, Rt Hon J. (Aberavon)
Wilson, Alexander (Hamilton)


Gould, Bryan
Murray, Rt Hon Ronald King
Wilson, Gordon (Dundee E)


Gourlay, Harry
Newens, Stanley
Wilson, Rt Hon H. (Huyton)

Wise, Mrs Audrey
Wrigglesworth, Ian
TELLERS FOR THE NOES


Woodall, Alec
Young, David (Bolton E)
Miss Margaret Jackson and


Wool, Robert

Mr. J. Dormand.




[See col. 1684]


Division No. 375.]
AYES
[7.32 p.m.


Allaun, Frank
Foot, Rt Hon Michael
Marquand, David


Anderson, Donald
Ford, Ben
Marshall, Dr Edmund (Goole)


Armstrong, Ernest
Forrester, John
Marshall, Jim (Leicester S)


Atkins, Ronald (Preston N)
Fraser, John (Lambeth, N'w'd)
Mason, Rt Hon Roy


Atkinson, Norman
Freeson, Reginald
Maynard, Miss Joan


Bagier, Gordon A. T.
Garrett, John (Norwich S)
Meacher, Michael


Bain, Mrs Margaret
Garrett, W. E. (Wallsend)
Mellish, Rt Hon Robert


Barnett, Guy (Greenwich)
George, Bruce
Mendelson, John


Bates, Alf
Gilbert, Dr John
Mikardo, Ian


Bean, R. E.
Ginsburg, David
Millan, Bruce


Benn, Rt Hon Anthony Wedgwood
Gould, Bryan
Miller, Dr M. S. (E Kilbride)


Bennett, Andrew (Stockport N)
Gourlay, Harry
Miller, Mrs Millie (Ilford N)


Bidwell, Sydney
Grant, John (Islington C)
Mitchell, R. C. (Soton, Itchen)


Bishop, E. S.
Grocott, Bruce
Molloy, William


Blenkinsop, Arthur
Hamilton, James (Bothwell)
Molyneaux, James


Boardman, H.
Harper, Joseph
Moonman, Eric


Booth, Albert
Harrison, Walter (Wakefield)
Morris, Alfred (Wythenshawe)


Bottomley, Rt Hon Arthur
Hart, Rt Hon Judith
Morris, Rt Hon J. (Aberavon)


Boyden, James (Bish Auck)
Hattersley, Rt Hon Roy
Mulley, Rt Hon Frederick


Bradley, Tom
Hatton, Frank
Murray, Rt Hon Ronald King


Bray, Dr Jeremy
Hayman, Mrs. Helene
Newens, Stanley


Brown, Hugh D. (Provan)
Heffer, Eric S.
Ogden, Eric


Buchanan, Richard
Henderson, Douglas
O'Halloran, Michael


Butler, Mrs Joyce (Wood Green)
Hooley, Frank
O'Malley, Rt Hon Brian


Callaghan, Jim (Middleton &amp; P)
Horam, John
Orbach, Maurice


Campbell, Ian
Howell, Denis (B'ham, Sm H)
Ovenden, John


Canavan, Dennis
Hoyle, Doug (Nelson)
Owen, Dr David


Cant, R. B.
Huckfield, Les
Padley, Walter


Carmichael, Neil
Hughes, Rt Hon C. (Anglesey)
Palmer, Arthur


Carson, John
Hughes, Mark (Durham)
Park, George


Carter, Ray
Hughes, Robert (Aberdeen N)
Parker, John


Carter-Jones, Lewis
Hughes, Roy (Newport)
Parry, Robert


Cartwright, John
Hunter, Adam
Pendry, Tom


Castle, Rt Hon Barbara
Irvine, Rt Hon Sir A. (Edge Hill)
Powell, Rt Hon J. Enoch


Clemitson, Ivor
Irving, Rt Hon S. (Dartford)
Prentice, Rt Hon Reg


Cocks, Michael (Bristol S)
Jackson, Colin (Brighouse)
Prescott, John


Cohen, Stanley
Janner, Greville
Price, C. (Lewisham W)


Coleman, Donald
Jay, Rt Hon Douglas
Price, William (Rugby)


Colquhoun, Mrs Maureen
Jeger, Mrs Lena
Radice, Giles


Concannon, J. D.
Jenkins, Hugh (Putney)
Roberts, Albert (Normanton)


Conlan, Bernard
Jenkins, Rt Hon Roy (Stechford)
Roberts, Gwilym (Cannock)


Cook, Robin F. (Edin C)
John, Brynmor
Roderick, Caerwyn


Corbett, Robin
Johnson, Walter (Derby S)
Rodgers, George (Chorley)


Cox, Thomas (Tooting)
Jones, Alec (Rhondda)
Rooker, J. W.


Craigen, J. M. (Maryhill)
Jones, Barry (East Flint)
Roper, John


Crawford, Douglas
Jones, Dan (Burnley)
Rose, Paul B.


Crawshaw, Richard
Judd, Frank
Ross, William (Londonderry)


Crosland, Rt Hon Anthony
Kaufman, Gerald
Rowlands, Ted


Cryer, Bob
Kelley, Richard
Sandelson, Neville


Cunningham, G. (Islington S)
Kilroy-Silk, Robert
Sedgemore, Brian


Cunningham, Dr J. (Whiteh)
Lambie, David
Shaw, Arnold (Ilford South)


Dalyell, Tarn
Lamborn, Harry
Sheldon, Robert (Ashton-u-Lyne)


Davidson, Arthur
Lamond, James
Short, Rt. Hon E. (Newcastle C)


Davies, Bryan (Enfield N)
Latham, Arthur (Paddington)
Silkin, Rt Hon John (Deptford)


Davis, Clinton (Hackney C)
Leadbitter, Ted
Sillars, James


Deakins, Eric
Lestor, Miss Joan (Eton &amp; Slough)
Skinner, Dennis


Dean, Joseph (Leeds West)
Lever, Rt Hon Harold
Small, William


de Freitas, Rt Hon Sir Geoffrey
Lewis, Arthur (Newham N)
Smith, John (N Lanarkshire)


Delargy, Hugh
Lewis, Ron (Carlisle)
Snape, Peter


Dempsey, James
Litterick, Tom
Spearing, Nigel


Doig, Peter
Loyden, Eddie
Spriggs, Leslie


Douglas-Mann, Bruce
Luard, Evan
Stallard, A. W.


Duffy, A. E. P.
Lyon, Alexander (York)
Stewart, Donald (Western Isles)


Dunnett, Jack
Lyons, Edward (Bradford W)
Stewart, Rt Hon M. (Fulham)


Dunwoody, Mrs Gwyneth
Mabon, Dr J. Dickson
Stoddart, David


Edge, Geoff
McCartney, Hugh
Stott, Roger


English, Michael
MacCormick, Iain
Strauss, Rt Hon G. R.


Ennals, David
McCusker, H.
Summerskill, Hon Dr Shirley


Evans, Fred (Caerphilly)
McElhone, Frank
Swain, Thomas


Evans, Gwynfor (Carmarthen)
MacFarquhar, Roderick
Taylor, Mrs Ann (Bolton W)


Evans, Ioan (Aberdare)
McGuire, Michael (Ince)
Thomas, Dafydd (Merioneth)


Ewing, Harry (Stirling)
Mackenzie, Gregor
Thomas, Jeffrey (Abertillery)


Faulds, Andrew
Maclennan, Robert
Thomas, Ron (Bristol NW)


Fernyhough, Rt Hon E.
McMillan, Tom (Glasgow C)
Thompson, George


Fitch, Alan (Wigan)
Madden, Max
Thorne, Stan (Preston South)


Fitt, Gerard (Belfast W)
Magee, Bryan
Tierney, Sydney


Flannery, Martin
Maguire, Frank (Fermanagh)
Tinn, James


Fletcher, Raymond (Ilkeston)
Mallalieu, J. P. W.
Tomlinson, John


Fletcher, Ted (Darlington)
Marks, Kenneth
Tomney, Frank

Torney, Tom
Weitzman, David
Wilson, Gordon (Dundee E)


Tuck, Raphael
Wellbeloved, James
Wilson, Rt Hon H. (Huyton)


Varley, Rt Hon Eric G.
Welsh, Andrew
Wise, Mrs Audrey


Wainwright, Edwin (Dearne V)
White, Frank R. (Bury)
Woodall, Alec


Walden, Brian (B'ham, L'dyw'd)
White, James (Pollok)
Wool, Robert


Walker, Harold (Doncaster)
Whitehead, Phillip
Wrigglesworth, Ian


Walker, Terry (Kingswood)
Wigley, Dafydd
Young, David (Bolton E)


Ward, Michael
Willey, Rt Hon Frederick



Watkins, David
Williams, Alan Lee (Hornchurch)
TELLERS FOR THE AYES:


Watkinson, John
Williams, W. T. (Warrington)

Mrs. Margaret Jackson and


Watt, Hamish
Wilson, Alexander (Hamilton)
Mr. J. D. Dormand.


Weetch, Ken






NOES


Adley, Robert
Gower, Sir Raymond (Barry)
Morrison, Hon Peter (Chester)


Aitken, Jonathan
Gray, Hamish
Mudd, David


Alison, Michael
Grimond, Rt Hon J.
Neave, Airey


Amery, Rt Hon Julian
Grist, Ian
Nelson, Anthony


Arnold, Tom
Grylls, Michael
Neubert, Michael


Atkins, Rt Hon H. (Spelthorne)
Hall, Sir John
Newton, Tony


Awdry, Daniel
Hall-Davis, A. G. F.
Nott, John


Banks, Robert
Hamilton, Michael (Salisbury)
Oppenheim, Mrs Sally


Beith, A. J.
Hampson, Dr Keith
Page, John (Harrow West)


Bell, Ronald
Hannam, John
Page, Rt Hon R. Graham (Crosby)


Bennett, Sir Frederic (Torbay)
Harrison, Col Sir Harwood (Eye)
Pardoe, John


Biffen, John
Harvie Anderson, Rt Hon Miss
Pattie, Geoffrey


Blaker, Peter
Hawkins, Paul
Penhaligon, David


Boscawen, Hon Robert
Hayhoe, Barney
Percival, Ian


Bottomley, Peter
Hicks, Robert
Pink, R. Bonner


Boyson, Dr Rhodes (Brent)
Higgins, Terence L.
Price. David (Eastleigh)


Braine, Sir Bernard
Hooson, Emlyn
Raison, Timothy


Brittan, Leon
Howell, David (Guildford)
Rathbone, Tim


Brotherton, Michael
Howell, Ralph (North Norfolk)
Rawlinson, Rt Hon Sir Peter


Brown, Sir Edward (Bath)
Howells, Geraint (Cardigan)
Rees, Peter (Dover &amp; Deal)


Buchanan-Smith, Alick
Hurd, Douglas
Rees-Davies, W. R.


Buck, Antony
Irvine, Bryant Godman (Rye)
Renton, Rt Hon Sir D. (Hunts)


Budgen, Nick
Irving, Charles (Cheltenham)
Renton, Tim (Mid-Sussex)


Bulmer, Esmond
James, David
Rhys Williams, Sir Brandon


Carlisle, Mark
Jenkin, Rt Hn P. (Wanst'd &amp; W'df'd)
Ridley, Hon Nicholas


Carr, Rt Hon Robert
Jessel, Toby
Rifkind, Malcolm


Chalker, Mrs Lynda
Johnson Smith, G. (E Grinstead)
Rippon, Rt Hon Geoffrey


Channon, Paul
Jopling, Michael
Roberts, Wyn (Conway)


Churchill, W. S.
Kershaw, Anthony
Rodgers, Sir John (Sevenoaks)


Clark, Alan (Plymouth, Sutton)
Kimball, Marcus
Ross, Stephen (Isle of Wight)


Cockcroft, John
King, Evelyn (South Dorset)
Rost, Peter (SE Derbyshire)


Cooke, Robert (Bristol W)
King, Tom (Bridgwater)
Sainsbury, Tim


Cope, John
Knight, Mrs Jill
Scott, Nicholas


Cormack, Patrick
Knox, David
Shaw, Giles (Pudsey)


Crouch, David
Lamont, Norman
Shaw, Michael (Scarborough)


Crowder, F. P.
Lane, David
Shelton, William (Streatham)


Davies, Rt Hon J. (Knutsford)
Langford-Holt, Sir John
Shepherd, Colin


Dodsworth, Geoffrey
Lawrence, Ivan
Shersby, Michael


Douglas-Hamilton, Lord James
Lawson, Nigel
Silvester, Fred


Drayson, Burnaby
Le Marchant, Spencer
Sims, Roger


du Cann, Rt Hon Edward
Lester, Jim (Beeston)
Sinclair, Sir George


Durant, Tony
Lewis, Kenneth (Rutland)
Skeet, T. H. H.


Dykes, Hugh
Lloyd, Ian
Smith, Cyril (Rochdale)


Eden, Rt Hon Sir John
Loveridge, John
Smith, Dudley (Warwick)


Edwards, Nicholas (Pembroke)
McAdden, Sir Stephen
Speed, Keith


Elliott, Sir William
McCrindle, Robert
Spicer, Jim (W Dorset)


Emery, Peter
Macfarlane, Neil
Spicer, Michael (S. Worcester)


Eyre, Reginald
MacGregor, John
Sproat, Iain


Fairbairn, Nicholas
Macmillan, Rt Hon M. (Farnham)
Stainton, Keith


Fairgrieve, Russell
McNair-Wilson, M. (Newbury)
Stanbrook, Ivor


Farr, John
McNair-Wilson, P. (New Forest)
Steel, David (Roxburgh)


Fell, Anthony
Madel, David
Steen, Anthony (Wavertree)


Finsberg, Geoffrey
Mates, Michael
Stewart, Ian (Hitchin)


Fisher, Sir Nigel
Mather, Carol
Stokes, John


Fletcher-Cooke, Charles
Maude, Angus
Stradling Thomas, J.


Fookes, Miss Janet
Mawby, Ray
Tapsell, Peter


Fowler, Norman (Sutton C'f'd)
Maxwell-Hyslop, Robin
Taylor, Teddy (Cathcart)


Fox, Marcus
Mayhew, Patrick
Tebbit, Norman


Fraser, Rt Hon H. (Stafford &amp; St)
Meyer, Sir Anthony
Temple-Morris, Peter


Freud, Clement
Miller, Hal (Bromsgrove)
Thomas, Rt Hon P. (Hendon S)


Fry, Peter
Mills, Peter
Thorpe, Rt Hon Jeremy (N Devon)


Gardiner, George (Reigate)
Mitchell, David (Basingstoke)
Townsend, Cyril D.


Gardner, Edward (S Fylde)
Moate, Roger
Trotter, Neville


Gilmour, Rt Hon Ian (Chesham)
Montgomery, Fergus
Vaughan, Dr Gerard


Glyn, Dr Alan
More, Jasper (Ludlow)
Viggers, Peter


Goodhart, Philip
Morgan, Geraint
Wainwright, Richard (Colne V)


Goodlad, Alastair
Morgan-Giles, Rear-Admiral
Walder, David (Ciltheroe)


Gorst, John
Morris, Michael (Northampton S)
Wall, Patrick


Gow, Ian (Eastbourne)
Morrison, Charles (Devizes)
Weatherill, Bernard

Wiggin, Jerry
Young, Sir G. (Ealing, Acton)
TELLERS FOR THE NOES:


Winterton, Nicholas
Younger, Hon George
Mr. Michael Roberts and


Wood, Rt Hon Richard

Mr. Richard Luce.




[See col. 1690]


Division No. 376.]
AYES
[8.02 p.m.


Allaun, Frank
Flannery, Martin
Maguire, Frank (Fermanagh)


Anderson, Donald
Fletcher, Raymond (likeston)
Mallaileu, J. P W.


Armstrong, Ernest
Fletcher, Ted (Darlington)
Marks, Kenneth


Ashley, Jack
Foot, Rt Hon Michael
Marquand, David


Atkins, Ronald (Preston N)
Ford, Ben
Marshall, Dr Edmund (Goole)


Atkinson, Norman
Forrester, John
Marshall, Jim (Leicester S)


Bagier, Gordon A. T.
Fowler, Gerald (The Wrekin)
Mason, Rt Hon Roy


Bain, Mrs Margaret
Fraser, John (Lambeth, N'w'd)
Maynard, Miss Joan


Barnett, Guy (Greenwich)
Freeson, Reginald
Meacher, Michael


Bates, Alf
Garrett, John (Norwich S)
Mellish, Rt Hon Robert


Bean, R. E.
Garrett, W. E. (Wallsend)
Mikardo, Ian


Benn, Rt Hon Anthony Wedgwood
George, Bruce
Millan, Bruce


Bennett, Andrew (Stockport N)
Gilbert, Dr John
Miller, Dr M. S. (E Kilbride)


Bidwell, Sydney
Ginsburg, David
Miller, Mrs Millie (Ilford N)


Bishop, E. S.
Gould, Bryan
Mitchell, R. C. (Soton, Itchen)


Blenkinsop, Arthur
Gourlay, Harry
Molloy, William


Boardman, H.
Grant, John (Islington C)
Molyneaux, James


Booth, Albert
Grocott, Bruce
Moonman, Eric


Bottomley, Rt Hon Arthur
Harrison, Walter (Wakefield)
Morris, Alfred (Wythenshawe)


Boyden, James (Bish Auck)
Hart, Rt Hon Judith
Morris, Rt Hon J. (Aberavon)


Bradley, Tom
Hattersley, Rt Hon Roy
Mulley, Rt Hon Frederick


Bray, Dr Jeremy
Hatton, Frank
Murray, Rt Hon Ronald King


Brown, Hugh D. (Provan)
Hayman, Mrs. Helene
Newens, Stanley


Buchanan, Richard
Heffer, Eric S.
Noble, Mike


Butler, Mrs Joyce (Wood Green)
Henderson, Douglas
Ogden, Eric


Callaghan, Jim (Middleton &amp; P)
Hooley, Frank
O'Halloran, Michael


Campbell, Ian
Horam, John
O'Malley, Rt Hon Brian


Canavan, Dennis
Howell, Denis (B'ham, Sm H)
Orbach, Maurice


Cant, R. B.
Hoyle, Doug (Nelson)
Orne, Rt Hon Stanley


Carmichael, Neil
Huckfield, Les
Ovenden, John


Carson, John
Hughes, Rt Hon C. (Anglesey)
Padley, Walter


Carter, Ray
Hughes, Mark (Durham)
Palmer, Arthur


Carter-Jones, Lewis
Hughes, Robert (Aberdeen N)
Park, George


Cartwright, John
Hughes, Roy (Newport)
Parker, John


Castle, Rt Hon Barbara
Hunter, Adam
Parry, Robert


Clemitson, Ivor
Irvine, Rt Hon Sir A. (Edge Hill)
Pendry, Tom


Cocks, Michael (Bristol S)
Irving, Rt Hon S. (Dartford)
Powell, Rt Hon J. Enoch


Cohen, Stanley
Jackson, Colin (Brighouse)
Prentice, Rt Hon Reg


Coleman, Donald
Jackson, Miss Margaret (Lincoln)
Prescott, John


Colquhoun, Mrs Maureen
Janner, Greville
Price, C. (Lewisham W)


Concannon, J. D.
Jay, Rt Hon Douglas
Price, William (Rugby)


Conlan, Bernard
Jeger, Mrs Lena
Radice, Giles


Cook, Robin F. (Edin C)
Jenkins, Hugh (Putney)
Reid, George


Corbett, Robin
John, Brynmor
Roberts, Albert (Normanton)


Cox, Thomas (Tooting)
Johnson, Walter (Derby S)
Roberts, Gwilym (Cannock)


Craigen, J. M. (Maryhill)
Jones, Alec (Rhondda)
Robertson, John (Paisley)


Crawford, Douglas
Jones, Barry (East Flint)
Roderick, Caerwyn


Crawshaw, Richard
Jones, Dan (Burnley)
Rodgers, George (Chorley)


Crosland, Rt Hon Anthony
Judd, Frank
Rooker, J. W.


Cryer, Bob
Kaufman, Gerald
Roper, John


Cunningham, G. (Islington S)
Kelley, Richard
Rose, Paul B.


Cunningham, Dr J. (Whiteh)
Kilroy-Silk, Robert
Ross, William (Londonderry)


Dalyell, Tarn
Lambie, David
Rowlands, Ted


Davidson, Arthur
Lamborn, Harry
Sandelson, Neville


Davies, Bryan (Enfield N)
Lamond, James
Sedgemore, Brian


Davis, Clinton (Hackney C)
Latham, Arthur (Paddington)
Shaw, Arnold (Ilford south)


Deakins, Eric
Leadbitter, Ted
Sheldon, Robert (Ashton-u-Lyne)


Dean, Joseph (Leeds West)
Lestor, Miss Joan (Eton &amp; Slough)
Short, Rt. Hon E. (Newcastle C)


de Freitas, Rt Hon Sir Geoffrey
Lewis, Arthur (Newham N)
Silkin, Rt Hon John (Deptford)


Delargy, Hugh
Lewis, Ron (Carlisle)
Sillars, James


Dempsey, James
Litterick, Tom
Skinner, Dennis


Doig, Peter
Loyden, Eddie
Small, William


Dormand, J. D.
Luard, Evan
Smith, John (N Lanarkshire)


Douglas-Mann, Bruce
Lyon, Alexander (York)
Snape, Peter


Duffy, A. E. P.
Lyons, Edward (Bradford W)
Spearing, Nigel


Dunnett, Jack
Mabon, Dr J. Dickson
Spriggs, Leslie


Dunwoody, Mrs Gwyneth
McCartney, Hugh
Stallard, A. W.


Edge, Geoff
MacCormick, Iain
Stewart, Donald (Western Isles)


English, Michael
McCusker, H.
Stewart, Rt Hon M. (Fulham)


Ennals, David
McElhone, Frank
Stoddart, David


Evans, Fred (Caerphilly)
MacFarquhar, Roderick
Stott, Roger


Evans, Gwynfor (Carmarthen)
McGuire, Michael (Ince)
Strauss, Rt Hon G. R.


Evans, Ioan (Aberdare)
Mackenzie, Gregor
Summersklll, Hon Dr Shirley


Ewing, Harry (Stirling)
Maclennan, Robert
Swain, Thomas


Faulds, Andrew
McMillan, Tom (Glasgow C)
Taylor, Mrs Ann (Bolton W)


Fernyhough, Rt Hon E.
McNamara, Kevin
Thomas, Dafydd (Merioneth)


Fitch, Alan (Wigan)
Madden, Max
Thomas, Jeffrey (Abertillery)


Fitt, Gerard (Belfast W)
Magee, Bryan
Thomas, Ron (Bristol NW)

Thompson, George
Watkins, David
Wilson, Alexander (Hamilton)


Thorne, Stan (Preston South)
Watt, Hamish
Wilson, Gordon (Dundee E)


Tierney, Sydney
Weetch, Ken
Wilson, Rt Hon H. (Huyton)


Tinn, James
Weitzman, David
Wise, Mrs Audrey


Tomlinson, John
Wellbeloved, James
Woodall, Alec


Torney, Tom
Welsh, Andrew
Woof, Robert


Tuck, Raphael
White, Frank R. (Bury)
Wrigglesworth, Ian


Varley, Fit Hon Eric G.
White, James (Pollok)
Young, David (Bolton E)


Wainwright, Edwin (Dearne V)
Whitehead, Phillip



Walden, Brian (B'ham, L'dyw'd)
Wigley, Dafydd
TELLERS FOR THE AYES:


Walker, Harold (Doncaster)
Willey, Rt Hon Frederick
Mr. Joseph Harper and


Walker, Terry (Kingswood)
Williams, Alan Lee (Hornchurch)
Mr. James Hamilton.


Ward, Michael
Williams, W. T. (Warrington)





NOES


Adley, Robert
Gray, Hamish
Mudd, David


Aitken, Jonathan
Grimond, Rt Hon J.
Neave, Airey


Alison, Michael
Grist, Ian
Nelson, Anthony


Amery, Rt Hon Julian
Grylls, Michael
Neubert, Michael


Arnold, Tom
Hall, Sir John
Newton, Tony


Atkins, Rt Hon H. (Spelthorne)
Hall-Davis, A. G. F.
Nott, John


Awdry, Daniel
Hamilton, Michael (Salisbury)
Oppenheim, Mrs Sally


Banks, Robert
Hampson, Dr Keith
Page, John (Harrow West)


Beith, A. J.
Hannam, John
Page, Rt Hon R. Graham (Crosby)


Bell, Ronald
Harrison, Col Sir Harwood (Eye)
Pardoe, John


Bennett, Sir Frederic (Torbay)
Harvie Anderson, Rt Hon Miss
Pattie, Geoffrey


Biffen, John
Hawkins, Paul
Penhaligon, David


Biggs-Davison, John
Hayhoe, Barney
Percival, Ian


Blaker, Peter
Hicks, Robert
Pink, R. Bonner


Boscawen, Hon Robert
Higgins, Terence L.
Price, David (Eastleigh)


Bottomley, Peter
Hooson, Emlyn
Raison, Timothy


Boyson, Dr Rhodes (Brent)
Hordern, Peter
Rathbone, Tim


Braine, Sir Bernard
Howell, David (Guildford)
Rawlinson, Rt Hon Sir Peter


Brittan, Leon
Howell, Ralph (North Norfolk)
Rees, Peter (Dover &amp; Deal)


Brotherton, Michael
Howells, Geraint (Cardigan)
Rees-Davies, W. R.


Brown, Sir Edward (Bath)
Hurd, Douglas
Renton, Rt Hon Sir D. (Hunts)


Buchanan-Smith, Alick
Irvine, Bryant Godman (Rye)
Renton, Tim (Mid-Sussex)


Buck, Antony
Irving, Charles (Cheltenham)
Rhys Williams, Sir Brandon


Budgen, Nick
James, David
Ridley, Hon Nicholas


Bulmer, Esmond
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Rifkind, Malcolm


Carlisle, Mark
Jessel, Toby
Rippon, Rt Hon Geoffrey


Carr, Rt Hon Robert
Johnson Smith, G. (E Grinstead)
Roberts, Michael (Cardiff NW)


Chalker, Mrs Lynda
Jopling, Michael
Roberts, Wyn (Conway)


Churchill, W. S.
Kershaw, Anthony
Rodgers, Sir John (Sevenoaks)


Clark, Alan (Plymouth, Sutton)
Kimball, Marcus
Ross, Stephen (Isle of Wight)


Clark, William (Croydon S)
King, Evelyn (South Dorset)
Rost, Peter (SE Derbyshire)


Cockcroft, John
King, Tom (Bridgwater)
Sainsbury, Tim


Cooke, Robert (Bristol W)
Knight, Mrs Jill
Scott, Nicholas


Cope, John
Knox, David
Shaw, Giles (Pudsey)


Crouch, David
Lamont, Norman
Shaw, Michael (Scarborough)


Crowder, F. P.
Lane, David
Shelton, William (Streatham)


Davies, Rt Hon J. (Knutsford)
Langtord-Holt, Sir John
Shepherd, Colin


Dodsworth, Geoffrey
Latham, Michael (Melton)
Shersby, Michael


Douglas-Hamilton, Lord James
Lawrence, Ivan
Silvester, Fred


Drayson, Burnaby
Lawson, Nigel
Sims, Roger


du Cann, Rt Hon Edward
Lester, Jim (Beeston)
Sinclair, Sir George


Durant, Tony
Lewis, Kenneth (Rutland)
Skeet, T. H. H.


Dykes, Hugh
Lloyd, Ian
Smith, Cyril (Rochdale)


Eden, Rt Hon Sir John
Loveridge, John
Smith, Dudley (Warwick)


Edwards, Nicholas (Pembroke)
McAdden, Sir Stephen
Speed, Keith


Elliott, Sir William
McCrindle, Robert
Spicer, Jim (W Dorset)


Emery, Peter
Macfarlane, Neil
Spicer, Michael (S. Worcester)


Eyre, Reginald
MacGregor, John
Sproat, Iain


Fairbairn, Nicholas
Macmillan, Rt Hon M. (Farnham)
Stainton, Keith


Fairgrieve, Russell
McNair-Wilson, M. (Newbury)
Stanbrook, Ivor


Farr, John
McNair-Wilson, P. (New Forest)
Steel, David (Roxburgh)


Fell, Anthony
Madel, David
Steen, Anthony (Wavertree)


Finsberg, Geoffrey
Mates, Michael
Stewart, Ian (Hitchin)


Fisher, Sir Nigel
Mather, Carol
Stokes, John


Fletcher-Cooke, Charles
Maude, Angus
Stradling Thomas, J.


Fookes, Miss Janet
Mawby, Ray
Tapsell, Peter


Fowler, Norman (Sutton C'f'd)
Maxwell-Hyslop, Robin
Taylor, Teddy (Cathcart)


Fox, Marcus
Mayhew, Patrick
Tabbit, Norman


Fraser, Rt Hon H. (Stafford &amp; St)
Meyer, Sir Anthony
Tample-Morris, Peter


Freud, Clement
Miller, Hal (Bromsgrove)
Thomas, Rt Hon P. (Hendon S)


Fry, Peter
Mills, Peter
Thorpe, Rt Hon Jeremy (N Devon)


Gardiner, George (Reigate)
Mitchell, David (Basingstoke)
Townsend, Cyril D.


Gardner, Edward (S Fylde)
Moate, Roger
Trotter, Neville


Gilmour, Rt Hon Ian (Chesham)
Montgomery, Fergus
Vaughan, Dr Gerard


Glyn, Dr Alan
More, Jasper (Ludlow)
Viggers, Peter


Goodhart, Philip
Morgan, Geraint
Wainwright, Richard (Colne V)


Goodlad, Alastair
Morgan-Giles, Rear-Admiral
Walder, David (Clitheroe)


Gorst, John
Morris, Michael (Northampton S)
Wall, Patrick


Gow, Ian (Eastbourne)
Morrison, Charles (Devizes)
Weatherill, Bernard


Gower, Sir Raymond (Barry)
Morrison, Hon Peter (Chester)

Wiggin, Jerry
Young, Sir G. (Ealing, Acton)
TELLERS FOR THE NOES:


Winterton, Nicholas
Younger, Hon George
Mr. Spencer Le Marchant and


Wood, Rt Hon Richard

Mr. Richard Luce.




[See col. 1692]


Division No. 377.]
AYES
[8.20 p.m.


Allaun, Frank
Fowler, Gerald (The Wrekin)
Mikardo, Ian


Anderson, Donald
Fraser, John (Lambeth, N'w'd)
Miller, Dr M. S. (E Kilbride)


Armstrong, Ernest
Freeson, Reginald
Miller, Mrs Millie (Ilford N)


Ashley, Jack
Garrett, John (Norwich S)
Mitchell, R C. (Soton, Itchen)


Atkins, Ronald (Preston N)
Garrett, W. E. (Wallsend)
Molloy, William


Atkinson, Norman
George, Bruce
Moonman, Eric


Bagler, Gordon A. T.
Gilbert, Dr John
Morris, Alfred (Wythenshawe)


Barnett, Guy (Greenwich)
Ginsburg, David
Morris, Rt Hon J. (Aberavon)


Bates, Alf
Gould, Bryan
Mulley, Rt Hon Frederick


Bean, R. E.
Gourlay, Harry
Murray, Rt Hon Ronald King


Benn, Rt Hon Anthony Wedgwood
Grant, John (Islington C)
Newens, Stanley


Bennett, Andrew (Stockport N)
Grocott, Bruce
Noble, Mike


Bid well, Sydney
Hamilton, James (Bothwell)
Ogden, Eric


Bishop, E. S.
Harrison, Walter (Wakefield)
O'Halloran, Michael


Blenkinsop, Arthur
Hart, Rt Hon Judith
O'Malley, Rt Hon Brian


Boardman, H.
Hattersley, Rt Hon Roy
Orbach, Maurice


Booth, Albert
Hatton, Frank
Orme, Rt Hon Stanley


Bottomley, Rt Hon Arthur
Hayman, Mrs. Helene
Ovenden, John


Boyden, James (Bish Auck)
Heffer, Eric S.
Padley, Walter


Bradley, Tom
Horam, John
Palmer, Arthur


Bray, Dr Jeremy
Howell, Denis (B'ham, Sm H)
Park, George


Brown, Hugh D. (Provan)
Hoyle, Doug (Nelson)
Parker, John


Buchanan, Richard
Huckfield, Les
Parry, Robert


Butler, Mrs Joyce (Wood Green)
Hughes, Rt Hon C. (Anglesey)
Pendry, Tom


Callaghan, Jim (Middleton &amp; P)
Hughes, Mark (Durham)
Prentice, Rt Hon Reg


Campbell, Ian
Hughes, Robert (Aberdeen N)
Prescott, John


Canavan, Dennis
Hughes, Roy (Newport)
Price, C. (Lewisham W)


Cant, R. B.
Hunter, Adam
Price, William (Rugby)


Carmichael, Neil
Irvine, Rt Hon Sir A. (Edge Hill)
Radice, Giles


Carter, Ray
Irving, Rt Hon S. (Dartford)
Roberts, Albert (Normanton)


Carter-Jones, Lewis
Jackson, Colin (Brighouse)
Roberts, Gwilym (Cannock)


Cartwright, John
Jackson, Miss Margaret (Lincoln)
Roderick, Caerwyn


Clemitson, Ivor
Janner, Greville
Rodgers, George (Chorley)


Cocks, Michael (Bristol S)
Jay, Rt Hon Douglas
Rooker, J. W.


Cohen, Stanley
Jeger, Mrs Lena
Roper, John


Coleman, Donald
Jenkins, Hugh (Putney)
Rose, Paul B.


Colquhoun, Mrs Maureen
John, Brynmor
Rowlands, Ted


Concannon, J. D.
Johnson, Walter (Derby S)
Sandelson, Neville


Conlan, Bernard
Jones, Alec (Rhondda)
Sedgemore, Brian


Cook, Robin F. (Edin C)
Jones, Barry (East Flint)
Shaw, Arnold (Ilford South)


Corbett, Robin
Jones, Dan (Burnley)
Sheldon, Robert (Ashton-u-Lyne)


Craigen, J. M. (Maryhill)
Judd, Frank
Short, Rt. Hon E. (Newcastle C)


Crawshaw, Richard
Kaufman, Gerald
Silkin, Rt Hon John (Deptford)


Crosland, Rt Hon Anthony
Kelley, Richard
Sillars, James


Cryer, Bob
Kilroy-Silk, Robert
Skinner, Dennis


Cunningham, G. (Islington S)
Lambie, David
Small, William


Cunningham, Dr J. (Whiteh)
Lamborn, Harry
Smith, John (N Lanarkshire)


Dalyell, Tam
Lamond, James
Snape, Peter


Davidson, Arthur
Latham, Arthur (Paddington)
Spearing, Nigel


Davies, Bryan (Enfield N)
Leadbitter, Ted
Spriggs, Leslie


Davis, Clinton (Hackney C)
Lestor, Miss Joan (Eton &amp; Slough)
Stallard, A. W.


Deakins, Eric
Lewis, Arthur (Newham N)
Stoddart, David


Dean, Joseph (Leeds West)
Lewis, Ron (Carlisle)
Stott, Roger


de Freltas, Rt Hon Sir Geoffrey
Litterick, Tom
Strauss, Rt Hon G. R.


Delargy, Hugh
Loyden, Eddie
Summerskill, Hon Dr Shirley


Dempsey, James
Luard, Evan
Swain, Thomas


Doig, Peter
Lyon, Alexander (York)
Taylor, Mrs Ann (Bolton W)


Dormand, J. D.
Lyons, Edward (Bradford W)
Thomas, Dafydd (Merioneth)


Douglas-Mann, Bruce
Mabon, Dr J. Dickson
Thomas, Jeffrey (Abertillery)


Duffy, A. E. P.
McCartney, Hugh
Thomas, Ron (Bristol NW)


Dunnett, Jack
McElhone, Frank
Thorne, Stan (Preston South)


Dunwoody, Mrs Gwyneth
MacFarquhar, Roderick
Tierney, Sydney


Edge, Geoff
McGuire, Michael (Ince)
Tinn, James


English, Michael
Mackenzie, Gregor
Tomlinson, John


Ennals, David
Maclennan, Robert
Torney, Tom


Evans, Fred (Caerphilly)
McMillan, Tom (Glasgow C)
Tuck, Raphael


Evans, Gwynfor (Carmarthen)
McNamara, Kevin
Varley, Rt Hon Eric G.


Evans, Ioan (Aberdare)
Madden. Max
Wainwright, Edwin (Dearne V)


Ewing, Harry (Stirling)
Magee, Bryan
Walden, Brian (B'ham, L'dyw'd)


Faulds, Andrew
Maguire, Frank (Fermanagh)
Walker, Harold (Doncaster)


Fernyhough, Rt Hon E.
Mallalieu, J. P. W.
Walker, Terry (Kingswood)


Fitch, Alan (Wigan)
Marks, Kenneth
Ward, Michael


Fitt, Gerard (Belfast W)
Marquand, David
Watkins, David


Flannery, Martin
Marshall, Dr Edmund (Goole)
Watkinson, John


Fletcher, Raymond (Ilkeston)
Marshall, Jim (Leicester S)
Weetch, Ken


Fletcher, Ted (Darlington)
Mason, Rt Hon Roy
Weitzman, David


Foot, Rt Hon Michael
Maynard, Miss Joan
Wellbeloved, James


Ford, Ben
Meacher, Michael
White, Frank R. (Bury)


Forrester, John
Mellish, Rt Hon Robert
White, James (Pollok)

Whitehead, Phillip
Wilson, Rt Hon H. (Huyton)
Young, David (Bollon E)


Wigley, Dafydd
Wise, Mrs Audrey



Willey. Rt Hon Frederick
Woodall, Alec
TELLERS FOR THE AYES:


Williams, Alan Lee (Hornchurch)
Woof, Robert
Mr. Joseph Harper am)


Williams, W. T. (Warrington)
Wrigglesworth, Ian
Mr. Thomas Cox.


Wilson, Alexander (Hamilton)






NOES


Adley, Robert
Hall, Sir John
Oppenheim, Mrs Sally


Aitken, Jonathan
Hall-Davis, A. G. F.
Page, John (Harrow West)


Alison, Michael
Hamilton, Michael (Salisbury)
Page, Rt Hon R. Graham (Crosby)


Amery, Rt Hon Julian
Hampson, Dr Keith
Pardoe, John


Arnold, Tom
Hannam, John
Pattie, Geoffrey


Atkins, Rt Hon H. (Spelthorne)
Harrison, Col Sir Harwood (Eye)
Penhaligon, David


Awdry, Daniel
Harvie Anderson, Rt Hon Miss
Percival, Ian


Bain, Mrs Margaret
Hawkins, Paul
Pink, R. Bonner


Banks, Robert
Hayhoe, Barney
Powell, Rt Hon J. Enoch


Beith, A. J.
Henderson, Douglas
Price, David (Eastleigh)


Bell, Ronald
Hicks, Robert
Raison, Timothy


Bennett, Sir Frederic (Torbay)
Higgins, Terence L
Rathbone, Tim


Biffen, John
Hooson, Emlyn
Rawlinson, Rt Hon Sir Peter


Biggs-Davison, John
Hordern, Peter
Rees, Peter (Dover &amp; Deal)


Blaker, Peter
Howell, David (Guildford)
Rees-Davies, W. R.


Boscawen, Hon Robert
Howell, Ralph (North Norfolk)
Reid, George


Bottomley, Peter
Howells, Geraint (Cardigan)
Renton, Rt Hon Sir D. (Hunts)


Boyson, Dr Rhodes (Brent)
Hurd, Douglas
Renton, Tim (Mid-Sussex)


Braine, Sir Bernard
Irvine, Bryant Godman (Rye)
Rhys Williams, Sir Brandon


Brittan, Leon
Irving, Charles (Cheltenham)
Ridley, Hon Nicholas


Brotherton, Michael
James, David
Rifkind, Malcolm


Brown, Sir Edward (Bath)
Jenkin, Rt Hn P. (Wanst'd &amp; W'df'd)
Rippon, Rt Hon Geoffrey


Buchanan-Smith, Alick
Jessel, Toby
Roberts, Michael (Cardiff NW)


Buck, Antony
Johnson Smith, G. (E Grinslead)
Roberts, Wyn (Conway)


Budgen, Nick
Jopling, Michael
Rodgers, Sir John (Sevenoaks)


Bulmer, Esmond
Kershaw, Anthony
Ross, Stephen (Isle of Wight)


Carlisle, Mark
Kimball, Marcus
Ross, William (Londonderry)


Carr, Rt Hon Robert
King, Evelyn (South Dorset)
Rost, Peter (SE Derbyshire)


Carson, John
King, Tom (Bridgwater)
Sainsbury, Tim


Chalker, Mrs Lynda
Knight, Mrs Jill
Scott, Nicholas


Channon, Paul
Knox, David
Shaw, Giles (Pudsey)


Churchill, W. S.
Lamont, Norman
Shaw, Michael (Scarborough)


Clark, Alan (Plymouth, Sutton)
Lane, David
Shelton, William (Streatham)


Clark, William (Croydon S)
Langford-Holt, Sir John
Shepherd, Colin


Cockcrott, John
Latham, Michael (Melton)
Shersby, Michael


Cooke, Robert (Bristol W)
Lawrence, Ivan
Sims, Roger


Cope, John
Lawson, Nigel
Sinclair, Sir George


Crawford, Douglas
Le Marchant, Spencer
Skeet, T. H. H.


Crouch, David
Lester, Jim (Beeston)
Smith, Cyril (Rochdale)


Crowder, F. P.
Lewis, Kenneth (Rutland)
Smith, Dudley (Warwick)


Davies, Rt Hon J. (Knutsford)
Lloyd, Ian
Speed, Keith


Dodsworth, Geoffrey
Loveridge, John
Spicer, Jim (W Dorset)


Douglas-Hamilton, Lord James
McAdden, Sir Stephen
Spicer, Michael (S. Worcester)


Drayson, Burnaby
MacCormick, Iain
Sproat, Iain


du Cann, Rt Hon Edward
McCrindle, Robert
Stainton, Keith


Durant, Tony
McCusker, H.
Stanbrook, Ivor


Dykes, Hugh
Macfarlane, Neil
Steel, David (Roxburgh)


Eden, Rt Hon Sir John
MacGregor, John
Steen, Anthony (Wavertree)


Edwards, Nicholas (Pembroke)
Macmillan, Rt Hon M. (Farnham)
Stewart, Ian (Hitchin)


Elliott, Sir William
McNair-Wilson, M. (Newbury)
Stokes, John


Emery, Peter
McNair-Wilson, P. (New Forest)
Stradling Thomas J.


Eyre, Reginald
Madel, David
Tapsell, Peter


Fairbairn, Nicholas
Mates, Michael
Taylor, Teddy (Cathcart)


Farr, John
Mather, Carol
Tebbit, Norman


Fell, Anthony
Maude, Angus
Temple-Morris, Peter


Finsberg, Geoffrey
Mawby, Ray
Thomas, Rt Hon P. (Hendon S)


Fisher, Sir Nigel
Maxwell-Hyslop, Robin
Thompson, George


Fletcher-Cooke, Charles
Mayhew, Patrick
Thorpe, Rt Kon Jeremy (N Devon)


Fookes, Miss Janet
Meyer, Sir Anthony
Townsend, Cyril D.


Fowler, Norman (Sutton C'f'd)
Miller, Hal (Bromsgrove)
Trotter, Neville


Fox, Marcus
Mills, Peter
Vaughan, Dr Gerard


Fraser, Rt Hon H. (Stafford &amp; St)
Mitchell, David (Basingstoke)
Viggers, Peter


Freud, Clement
Moate, Roger
Wainwright, Richard (Colne V)


Fry, Peter
Molyneaux, James
Walder, David (Clitheroe)


Gardiner, George (Reigate)
Montgomery, Fergus
Wall, Patrick


Gardner, Edward (S Fylde)
More, Jasper (Ludlow)
Watt, Hamish


Gilmour, Rt Hon Ian (Chesham)
Morgan, Geraint
Weatherill, Bernard


Glyn, Dr Alan
Morgan-Giles, Rear-Admiral
Welsh, Andrew


Goodhart, Philip
Morris, Michael (Northampton S)
Wiggin, Jerry


Goodlad, Alastair
Morrison, Charles (Devizes)
Wilson, Gordon (Dundee E)


Gorst, John
Morrison, Hon Peter (Chester)
Winterton, Nicholas


Gow, Ian (Eastbourne)
Mudd, David
Wood, Rt Hon Richard


Gower, Sir Raymond (Barry)
Neave, Airey
Young, Sir G. (Ealing, Acton)


Gray, Hamish
Nelson, Anthony
Younger, Hon George


Grimond, Rt Hon J.
Neubert, Michael
TELLERS FOR THE NOES:


Grist, Ian
Newton, Tony
Mr. Richard Luce and


Grylls, Michael
Nott, John
Mr. Fred Silvester.

Orders of the Day — POLICYHOLDERS PROTECTION BILL [Lords]

As amended (in the Standing Committee), considered.

New Clause 1

Special provision with respect to long-term business of a company in financial difficulties.

'(1) Without prejudice to subsection (8) of section 16 of this Act, the Board shall not take any measures in pursuance of subsection (3) or (4) of that section for the purpose of safeguarding any policyholders of a company in financial difficulties in respect of long term policies of the company, other than measures allowed by subsection (2) below, in any case where it appears to the Board that to take those other measures would cost them more than to take measures allowed by subsection (2) below.

(2) The measures allowed by this subsection are any measures open to the Board under subsection (3) or (4) of section 16 of this Act for the purpose of safeguarding policyholders of a company in financial difficulties which involve the imposition by the Board, as a pre requisite of their incurring any expenditure or liabilities for that purpose, of conditions requiring—

(a) the reduction of all liabilities of the company under relevant long term policies and of all benefits provided for under any such policies which have not fallen due to be paid by the company before the time when the reduction is to take effect, to ninety per cent. of the amount which would otherwise have been payable in accordance with the terms of the policies; and
(b) the reduction of all premiums under any such policies which have not fallen due before that time to ninety per cent. of the amount which would otherwise have been so payable.

A long term policy is a relevant long term policy for the purposes of this subsection if it is included in any transfer secured or facilitated by the Board under subsection (3) of section 16 or in any business continued by virtue of any assistance given by the Board under subsection (4) of that section.

(3) Without prejudice to the power of the Board to impose conditions in relation to taking any measures under subsection (3) or (4) of section 16 of this Act with respect to matters other than those covered by the conditions mentioned in subsection (2) above, the benefits mentioned in paragraph (a) of subsection (2) shall not include any bonus provided for under a policy unless it was declared before the time when any such reduction of liabilities

and benefits under that policy as is mentioned in that paragraph is to take effect.

(4) If it appears to the Board, in the case of any long term policy of a company in financial difficulties which was a United Kingdom policy at the relevant time as defined by section 16(6) of this Act, that the benefits provided for there under are or may be excessive in any respect, having regard to the premiums paid or payable and to any other terms of the policy, the Board shall refer the policy to an independent actuary.

(5) Where an actuary to whom a policy of a company in financial difficulties is referred under subsection (4) above makes to the Board a report in writing—

(a) stating, with respect to any of the benefits provided for under the policy, that in his view the benefit or benefits in question are excessive; and
(b) recommending, accordingly, that for the purposes of any measures to be taken by the Board in pursuance of subsection (3) or (4) of section 16 of this Act for safeguarding the policyholder in question against loss ariesing from the financial difficulties of the company any such benefit should be treated as reduced or (as the case may be) disregarded;

the Board may determine in the light of any recommendation contained in the actuary's report that any benefit to which that recommendation relates shall be treated as reduced or disregarded for those purposes.

(6) Where in a case falling within subsection (5) above the Board determine that the benefit in question shall be disregarded for the purposes there mentioned, the conditions mentioned in subsection (2) above shall include conditions requiring the cancellation of that benefit or (as the case may be) of any liability representing that benefit.

(7) Where in a case falling within subsection (5) above the Board determine that the benefit in question shall be treated as reduced for the purposes there mentioned, subsection (2)(a) above shall apply in relation to the policy as if the amount of that benefit or (as the case may be) of any liability representing that benefit, as reduced in accordance with the Board's determination, were the amount which would otherwise have been payable in accordance with the terms of the policy.

(8) In this section "company in financial difficulties" has the same meaning as in section 16 of this Act. '—[Mr. Clinton Davis.]

Brought up, and read the First time.

4.5 p.m.

The Under-Secretary of State for Trade (Mr. Clinton Davis): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this we may take Government Amendments Nos. 19 to 22.

Mr. Davis: The new clause, with Amendment No. 22, constitutes a redrafting of Clause 16(8) as it emerged from


Committee. There is no change of substance save to make the rôle of the independent actuary consistent with the rôle which is proposed under Clause 12, and Amendments Nos. 19 to 21 are paving amendments for the new clause.
Clause 16 permits the Board, in defined circumstances, to expend money in facilitating the rescue of the insurance business of a failing company in advance of a liquidation. In Committee it was common ground that a further provision should be added to Clause 16 to make crystal clear that the Board in exercising this power in respect of long-term business should ensure that policyholders' benefits were written down to 90 per cent., or more in cases of over-generous benefits, unless to do otherwise would cost less, or, at any rate, no more.
The Government put down a short amendment in Committee which they thought would achieve this goal, but certain members of the Committee, including some of my hon. Friends, thought that the Government's wording was unsatisfactory in that it was insufficiently specific. They therefore pressed an alternative, much longer, amendment and their view prevailed. That amendment now appears in the Bill as subsection (8).
The Government accept the wish of the Committee for a fuller and more specific provision, but Clause 16(8) was not prepared by parliamentary draftsmen. It is unduly long and contains certain defects of wording and illogicalities. It also, as in the present text of Clause 12, leaves the final decision on over-generous benefits with the independent actuary. In Committee I undertook to move amendments on Report—which I hope to do shortly—which transfer the burden of that decision from the actuary to the Board. There is, therefore, an important defect in the provision as set out in the clause.
For those reasons we thought it right, in consultation with the Life Offices Association, to redraft the whole subsection. Amendment No. 22 drastically shortens subsection (8) and deals only with the point now covered in paragraph (c)(i), the only part of the subsection that applies to general as well as long-term business. This restores the effect of subsection (8) to exactly what it was in the Bill which the House considered on Second Reading. All the rest of the

subsection has been hived off into the new clause.
To summarise, the new clause, together with the associated amendments, reproduces the effect of subsection (8) without any change of substance, apart from the one I have touched on concerning the rôle of the independent actuary. It has been discussed and agreed with the Life Offices Association. For those reasons, I commend the clause to the House.

Mr. Terence Higgins: There can have been few measures ever to pass through this House which have been more amended than this one. To some extent we are retracing our steps and reversing earlier amendments. I hope that the effect will be to refine the Bill. That is probably true, although it has not greatly reduced the complexity of the measure. Some of the lengthy amendments carried in Committee are being curtailed. Obviously, excessive length is to be avoided if possible. However, we are worried that the changes made in this tidying-up process may be obscure. We must ensure that the tidying-up process does not eliminate desirable changes.
Where in the Bill is the new clause expected to appear? I understood that these provisions would appear in Clause 16. There are references in the clause to Clause 16. If the clause is to be part of Clause 16, the references seem unnecessary.
We are concerned about the effect of the new clause in the light of discussions in Committee. The new clause and the amendments associated with it will be relevant whether there is a rescue or a liquidation. The point is whether in either circumstance the over-generous benefits will be reduced. Is it the Government's intention that over-generous benefits should be reduced in either case? It was the general view on both sides of the Committee that that was desirable.
The Minister said that the Board would favour liquidation rather than rescue if the cost was less or no greater. That was the general view in Committee. Will the Minister say whether in either circumstance—liquidation or rescue—there will be a levy? That will be relevant to subsequent discussion this afternoon. For example, what will be the


position on the vexed question of Nation Life if the liquidation has begun and made considerable progress?
What is the opinion of the Minister about the reduction in excessive benefits? The clause implies that in certain circumstances excessive benefits under policies issued by companies which may be rescued or which are in liquidation may be reduced or disregarded.

Mr. Clinton Davis: That is correct.

Mr. Higgins: The argument is that, whether there is a liquidation or rescue, excessive benefits may be reduced or disregarded. I am not clear what it meant technically by the expression "disregarded". Does it mean that the person concerned would receive nothing? Alternatively, will he receive benefit but only to the extent that the benefit is not excessive? The expression "disregarded" seems odd. I am not clear why the draftsmen think that that expression needs to be included.
We are grateful to the Government for gracefully accepting the suggestions that were made, although in view of the balance of voting in Committee and in the House they do not appear to have had any option. At least they have accepted gracefully the intention of the Committee. I hope that the later amendments will continue to tidy up the drafting which was put through in Committee.

4.15 p.m.

Mr. John Roper: I am grateful that the Government have accepted the principle of the new clause, which was put down in the names of my hon. Friend the Member for Edmonton (Mr. Graham) and myself in Committee, and that it has been put in a form which, although longer, is more acceptable to parliamentary draftsmen. Such probing as I have been able to carry out suggests that the new wording covers the points that were included in the amendment passed in Committee.
Although I am tempted to answer some of the points raised by the hon. Member for Worthing (Mr. Higgins), perhaps I should leave the Minister to do so. We are pleased that he has accepted our amendment.

Mr. Clinton Davis: The hon. Member for Worthing (Mr. Higgins) was unfair in

what he said initially about the Government's new Clause and its draftsmanship, although he tempered his sentiments later. The Committee thought it appropriate—I do not grumble about that—to accept an amendment which needed a good deal of tidying up. We have attempted to do that.
I am grateful for the remarks of my hon. Friend the Member for Farnworth (Mr. Roper).
The hon. Member for Worthing wanted to know where the new Clause would appear. It will not appear in Clause 16. I expect that it will appear immediately after Clause 16. The provision is relevant only to rescues or action by the Board before a liquidation. The liquidation situation is relevant only for the purposes of comparison of cost.

Mr. Higgins: For the sake of comprehensiveness and comparison, will the Minister say what is the position of excessive benefits if there is a liquidation?

Mr. Davis: Excessive benefits on liquidation will be taken into account by the Board. I was asked what would happen about excessive benefits if the liquidation had already begun. The answer to that point is encompassed by my previous remarks.
I was also asked about the word "disregarded". Some benefits under a policy may be disregarded. I refer, for example, to a guaranteed surrender value. That follows the wording of Clause 12. The amendment is complicated and I do not pretend that it is easy to follow. However, it embraces the purpose of the amendment which was passed in Committee.

Mr. Higgins: Can the Minister expand a little on that point? He gave as an example guaranteed surrender value. Are there other possible excessive benefits that might be completely disregarded?

Mr. Davis: I gave one example. I cannot, off the cuff, provide the hon. Gentleman with others. It is conceivable that situations might emerge which would confer an excessive benefit, but this is the example that immediately comes to mind and that is why I cite it.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 2

THE EXEMPT INCOME LEVEL FOR THE PURPOSES OF SECTION 18

'(1)For the purposes of section 18 of this Act the exempt income level of an intermediary of a company for any year is—

(a) where no other person is linked with the intermediary, £5,000; and
(b) in any other case, that proportion of £5,000 which is equal to the proportion which the intermediary's income from the company in respect of relevant services for the year in question bears to the total amount of the group's income from the company in respect of such services for that year.

In paragraph (b) above "the group" means the intermediary together with the person or (where there are more than one) all of the persons linked with the intermediary.

(2) Where in a case falling within subsection (1)(b) above the income from the company in respect of relevant services for any year—

(a) of the intermediary; and
(b) of each person linked with the intermediary;

did not exceed £1,000, no account shall be taken of that income for the purposes of section 18 of this Act.

(3) The following are persons linked with an intermediary for the purposes of this section, whether the intermediary is a company or a person other than a company—

(a) any partner of the intarmediary and any partnership of which the intermediary is a member;
(b) any company of which the intermediary is a director; and
(c) any director of any company which is linked with the intermediary.

(4) Where the intermediary in question is a company the following are also persons linked with the intermediary for the purposes of this section—

(a) any person other than a company who has a controlling interest in the intermediary, and any company other than the intermediary in which any such person also has a controlling interest;
(b) any company of which the intermediary is a subsidiary and any other subsidiary of any such company;
(c) any subsidiary of the intermediary; and
(d) any director of the intermediary.

(5) Where the intermediary in question is a person other than a company the following are also persons linked with the intermediary for the purposes of this section—

(a) any company in which the intermediary has a controlling interest;
(b) any company of which a company linked with the intermediary by virtue of subsection (3)(b) or paragraph (a) above is a

subsidiary and any other subsidiary of any such company;
(c) any subsidiary of any company linked with the intermediary by virtue of subsection (3)(b) or paragraph (a) above; and
(d) where the intermediary is a partnership, each of its members.

(6) A person other than a company shall be treated as having a controlling interest in a company for the purposes of subsections (4)(a) and (5)(a) above if, but only if, that company would be a subsidiary of the person in question if that person were a company.

(7) In determining for the purposes of subsection (6) above whether a company would be a subsidiary of any person other than a company, any shares held or power exercisable by either of two spouses or by both spouses jointly shall be treated as held or exercisable by each spouse.

(8) In subsections (3) to (7) above "company" has the same meaning as in section 154 of the Companies Act 1948 (meaning of "holding company" and "subsidiary"). '—[Mr. Clinton Davis.]

Brought up, and read the First time.

Mr. Deputy Speaker (Mr. George Thomas): With this new clause we shall take Government Amendments Nos. 1, 13, 33 to 37, 47 to 49, and Amendment No. 26, in page 18, line 29, leave out Clause 18.

Mr. Clinton Davis: I beg to move, That the clause be read a Second time.
The clause and the amendments are interlinked and relate to the levy on intermediaries, which is the subject of Clause 18 and Schedule 2. This provision as to the levy did not appear in the original Government proposals but was inserted against the Government's advice in another place.
We continued to have reservations about the practicality of the new provision, but it clearly had wide support on both sides of the Committee and in another place. We accepted the principle of the new levy, and we have tried to resolve the practical difficulties and to improve the draftsmanship of the clause and the schedule as they reached us from the other place. This subject was discussed at length in Standing Committee, and the present Clause 18 and Schedule 2 were finally accepted as welcome improvements to the original wording. In assenting to Clause 18 and Schedule 2, members of the Committee asked the Government to reconsider one or two points of detail before Report. In those circumstances, I am putting forward these


provisions and I shall deal with them under three headings.
Let me first deal with aggregation of earnings of linked intermediaries. I turn first to new Clause 2 and related amendments dealing with the aggregation for purposes of the levy of the income of linked intermediaries. It was suggested in Committee that so that the clause should apply equitably to intermediaries who happen to be organised in different ways and also to minimise opportunities for evasion, the earnings of linked intermediaries should be aggregated when the levy is assessed.
A problem arises because the clause exempts from the levy the first £5,000 of any income which an intermediary has received from a failed company in any one year. Accordingly, an intermediary who organises himself as a group of legally separate units, albeit under common ownership, will be less liable to the levy than an intermediary of comparable size who chooses to run his business as a single unit.
Under subsection (1), where intermediaries are linked the exempt income level of £5,000 is to be divided between them in the same ratio as the earnings of each have to the earnings of the group as a whole. To avoid excessive work for the Board in chasing up a large number of small claims subsection (2) provides for a further exemption from the levy where the income of no member of a group of linked intermediaries exceeds £1,000.
Subsections (3), (4), (5) and (6) set out the various categories of intermediaries that are to be regarded as linked for the purpose of this clause. The definition is inevitably complicated since intermediaries may be individuals, partnerships or companies. Subsection (7) provides for the counting together of husbands and wives when determining who has the controlling interest in a corporate intermediary. Subsection (8) applies to the new clause the definition of a subsidiary company in Section 154 of the Companies Act 1948.
I do not claim that the new clause covers all conceivable linkages between intermediaries—there is really no limit to the refinements one could make—but it

deals with the most obvious ones and goes, I believe, as far as it is reasonable to go in the context of the present Bill.
Amendments Nos. 33, 34, 35, 36 and 37 are simply consequential in regard to the new Clause and Clause 18. Amendments Nos. 47, 48 and 49 to Schedule 2 provide for implementation and enforcement of the provisions of the new clause.
New paragraph 2A of the schedule in Amendment No. 47 enables the Board to obtain from intermediaries the information they need to determine whether intermediaries are linked within the meaning of the new clause. The new paragraph 2B provides for offences and penalties where intermediaries fail to respond to a notice from the Board requiring information or knowingly supply false information. This point also was dealt with in Committee and I undertook to deal with the matter. The offences and penalties are parallel to those laid down in Schedule 3 for insurance companies which fail to supply correct statements of income liable to Clause 19 levies. The remaining amendments to Schedule 2 are consequential and relate to delivery of the notices for which the schedule provides.

Mr. Tim Renton: I believe that the Minister referred to Amendments Nos. 47 and 43. May I point out that we are not now debating those provisions but that they come later?

Mr. Davis: That is correct, but I am not prohibited from mentioning them, and that is all I have done. I am in no way seeking to prevent any debate on those matters at some future stage.
Finally, there are paving amendments to Clause 18 and the new clause. I refer to Amendments Nos. 1 and 13. The first inserts a reference to the levy on intermediaries in the statement of the Board's functions in Clause 1(2). The other includes a reference to the levy on intermediaries in Clause 13(3), which relieves the Board of the need to incur expenditure in fulfilment of its duties in any period when the funds available to it from levies or otherwise are insufficient.
This is a complicated series of amendments, but I hope that we have accomplished what we set out to do. I commend the new clause and the amendments to the House.

4.30 p.m.

Mr. Tim Renton: As the Undersecretary has said, the question of the principle of the levy on intermediaries or brokers in the insurance business was raised and substantially discussed in Committee. We shall have an opportunity to discuss this principle again later when we debate Amendment No. 28 in the name of my hon. Friends and myself.
In this debate we are considering only the attempt in new Clause 2 to define which companies should be aggregated or consolidated together for the purpose of arriving at the exempt income level of £5,000. As the Minister said, in Committee the point was raised that the principle of the exempt income level of £5,000 could be abused by a number of subsidiary companies being set up, each of which could write or broke an appropriate amount of business in order to receive approximately £5,000 each and thus not be subject to the clawback—in the event of the clawback from intermediaries ever being enforced.
However, in trying to define the principle of aggregation or consolidation in new Clause 2 the Government have, in large degree, made confusion worse confounded. This new clause is extremely hard to understand. I believe that (he clause could be an extremely good candidate for the Renton Report on the preparation of legislation, which this House will consider on Monday evening, because although I have read the clause a number of times I still find various paragraphs extraordinarily hard to understand.
When the Minister was speaking I noted a good deal of hesitancy in his voice. That hesitancy was well justified. I want to set forth in simple arithmetical terms how new Clause 2 might operate. Perhaps the Minister will tell me later—I am sure other hon. Members will wish to speak on this—whether I have the sums right. I start with subsection (1)(a). I assume from this paragraph that if the business transacted leads to income of less than £5,000 and the company or person concerned is not linked with anyone else, there is no clawback.
We then come to subsection (1)(b). The wording of this paragraph leads us into great trouble. The wording appears to mean that if the insurance company concerned were to have paid income of

£25,000 for relevant services to a group of companies and the particular intermediary has received an income of £5,000 for his relevant services, his exempt income level would be only £1,000. That is arithmetical proposition No. 1. Perhaps the Minister will correct or confirm it later.
I turn to subsection (3)(b) and (3)(c). In arriving at this definition of which companies should be consolidated together, the Government are, in effect, saying that if one of my hon. Friends is a member of the board of a firm of insurance brokers and is also a member of the board of, perhaps, five other firms of insurance brokers, by virtue of those interlocking directorships all these companies should be consolidated together. Therefore, although there is no linking shareholding, we could have a situation in which a great number of insurance brokers or intermediaries were consolidated together purely because they had one common director, and for no other reason.
The effect that this has on the exempt income level is startling. I have already given an example of where the exempt income level would fall to £1,000. However in the case I have mentioned and if my understanding of the clause is right, if there is a common director between four intermediaries and between them they have received income for relevant services of £100,000 from the insurance company in question and one of those intermediaries has received only £5,000 or 5 per cent. of that £100,000, its exempt income level would fall to 5 per cent. of the £5,000, that is, £250. That is arithmetical proposition No. 2.
I appreciate the Government's difficulties in trying to draft a suitable consolidation clause, but if my mathematical understanding is correct and if, under the terms I have suggested, we could find that an exempt income level of one intermediary were to fall because he was consolidated with others who had written a total of £100,000 and he had written only £5,000, his exempt income level could fall to 5 per cent. of £5,000, that is £250. There is no logic in it. If £5,000 is thought to be an appropriate level for exempt income levels, consolidation simply by virtue of an interconnecting individual directorship has gone too far.
On that basis the Government should think again about how the clause has


been drafted. Perhaps later in the debate the Minister will tell me that my understanding and interpretation of the arithmetical figures is not totally correct but as of now that is my understanding of this extremely complicated clause. For unnecessary reasons the exempt income level for an individual member of this remote group could fall too far below the £5,000 level that the Government think appropriate. I trust that the Minister will answer that point later.

Mr. A. P. Costain: Has my hon. Friend the Member for Mid-Sussex (Mr. Renton) come across the same problem as I have; namely, at what stage an interlocking director is appointed and when these calculations start to be calculated?

Mr. Renton: My hon. Friend has raised another relevant point of definition. It is not clear from the clause the time at which an appointment of a director would be effective for purposes of consolidation. This point has not been raised in this new clause. It could be relevant because a new director could join a board virtually within the last days of the year and, therefore, the relevant income level of the intermediary whose board he joined could fall substantially. That is another point for the Government to consider.

Mr. Ted Graham: I welcome the new clause because it is the result of amendments that were tabled in Committee but which were withdrawn after certain assurances had been given to us by the Under-Secretary. The clause was introduced, with Government opposition, in another place by Lord Peddie who, together with my hon. Friend the Member for Farnworth (Mr. Roper) and myself, has very strong co-operative connections.
We are satisfied that the review which took place in Committee and the scrutiny which has taken place since have improved the intentions of the clause that appeared in the Bill in another place. We are grateful indeed to the Undersecretary for fulfilling the commitments he gave to the Committee. Therefore, my hon. Friend the Member for Farnworth and myself very much welcome these improvements.

Mr. Roger Moate: I rise equally briefly to cover one very small

point. Before doing that perhaps I may congratulate my hon. Friend the Member for Mid-Sussex (Mr. Renton) on the amazing way in which he managed to see through the fog of this new clause. If I had understood him correctly, I am sure that I should have been able to say that he had a very strong point, but as I did not understand him correctly I shall have to read what he said very carefully later.
It all sounds very alarming and complicated. I only hope that the Board never has the need to apply this levy in practice. My hon. Friend's skill in seeing through the fog would qualify him as a referee in international football matches in Czechoslovakia, even though the spectators might not see what was going on.
This is a complicated clause. I have no wish to complicate it further. The Minister said that it would be a mind-boggling exercise to try to define all possible relationships. In our discussions on the Insurance Companies Act 1974 we had similar problems in trying to define who was and who was not a controller of an insurance company. When we came to the question of parental relationships, we produced in the end a satisfactory set of proposals that covered a much wider range of relationships than simply both spouses, as referred to in subsection (7). I suggest to the Minister that it may be easier—perhaps he will consider the matter in any event—to take the definition from the 1974 Act, which would offer an already tested and accepted definition of relationships in an insurance context.

Mr. Robert McCrindle: I am glad that everyone else is glad that there has been this great improvement in the clause. I feel a little like the odd man out, because although everyone else understands it, I, with the small benefit of having spent a few years in the insurance business, do not. Nevertheless, I am prepared to accept the Minister's assurance that this is an improvement on the original form. Anyone who has read the original form must wonder how we ever got as far as this clarification which is an improvement.
As a simple, direct person, I want to put to the Minister one simple and direct point. Let us suppose that there are 50 people who pay their national insurance contributions at the self-employed rate.


Let us suppose that they all sell life assurance policies and that their income from one company which subsequently gets into difficulties is £999. Assuming that they are linked only by the provision of administrative and technical services and that, therefore, they remain, first, self-employed and, second, independent agents, they all escape the net of the intermediaries levy. If that is so, why should they be so different from 50 people who pay national insurance at the employed rate and are having the services provided by a company? In other words, will not there be the greatest incentive to people to become pseudo-self-employed so as to avoid the imposition of the levy, whereas those companies which continue to employ representatives as they do at present are likely to be penalised?
I started by saying that this would be a clear point. I had better leave it there, because it becomes murkier the longer I address myself to the problem. However, the Minister should be clear whether there is a real way out of this imposition in the way I have suggested. Perhaps I have been not only partly misreading the clause but totally misreading it.

4.45 p.m.

Mr. Clinton Davis: I assure the House that there are some mysterious people in and around this place who do understand the entirety of this clause. I shall try to deal with the points raised by the hon. Member for Mid-Sussex (Mr. Renton) in the order in which he raised them.
As regards the hon. Gentleman's first point, the answer is that there would be no clawback in those circumstances. As regards his second point, which he described as his first proposition, in so far as I was able to follow his argument—no doubt he found it extremely difficult to follow mine—I think that the answer is "Yes", but I shall read in the Official Report what he said. However, I think that what he was aiming at was the principle of the matter rather than these abstruse mathematical calculations which I had some difficulty in following. I am glad to know that I was not alone in that regard.
Interlocking directorships will have the effect of linking not the intermediaries but only the director himself. If he has relevant income on his own account, this is linked, but not his company.
Having said that, I think that the hon. Gentleman will see his way very clearly through what is intended here, and that therefore his other calculation, equally abstruse, does not arise.

Mr. Tim Renton: I am very interested in the Minister's comment. If this is so, it helps me a long way through the problem I had envisaged. If I understand him correctly, he is saying that the link flows only through an individual director if he has income for relevant services, and that company A is not linked with company B for the purpose of the new clause simply because Mr. X is a director of both. It is indeed helpful, but I wonder whether to a layman this would be clearly understood from subsection (3)(b) and (c). In my judgment it is not totally clear from those paragraphs.

Mr. Davis: I assure the hon. Gentleman that from messages I have been receiving from my constituents I know that they are talking of nothing else and understand it very well.

Mr. Renton: They must be extremely intelligent.

Mr. Davis: Indeed they are.
My hon. Friend the Member for Edmonton (Mr. Graham) clearly understands it all. I am delighted about that. He is perfectly satisfied that I have implemented the undertaking which I gave.
The hon. Member for Faversham (Mr. Moate) hoped that the Board would never have to apply these very difficult rules. I hope that that is so as well. I am sure that the whole House hopes that that would be the position. But we have to deal with possibilities and we cannot be sure what will arise in the future. The hon. Gentleman is quite right, and he reflects what I said earlier. It is extremely difficult to define the links with any real degree of satisfaction.
He asked why we did not apply the same definition as was provided for in the 1974 legislation. The answer is that we are dealing with a different problem, in a sense. Having regard to the nature of the people we would be levying here it is a much smaller problem than that of controllers of insurance companies. It was thought—and I accept responsibility for this—that it would be better in all circumstances not to be caught up in the


maze of difficulties which apply—I think properly apply—when it comes to questions affecting controllers of insurance companies.
The hon. Member for Brentwood and Ongar (Mr. McCrindle)—always on the ball on these matters, and not going on for too long so that he got off the ball—asked whether self-employed people would devise methods of escaping the levy. It would be wrong of me to discount that possibility altogether, but I suspect that they will not go to all the trouble that would clearly be necessary to do that. The hon. Gentleman may be right, however, and we shall have to see how the situation develops.

Mr. Higgins: We have always had some trouble with the Under-Secretary, in that he assumes that what he says will become the law. A number of my hon. Friends have some concern about whether the wording of the clause is adequate to bear the interpretation the hon. Gentleman has placed upon it as regards the position of individual directors.
We do not wish to press the matter to a Division, but I think that the Undersecretary will accept that this point is worth studying before the Bill goes to another place. It is a complex matter. The Under-Secretary may well be right, but many of my hon. Friends think that the wording could be improved to make what the Under-Secretary says clear beyond a peradventure.

Mr. Clinton Davis: I am disappointed that the hon. Member for Worthing (Mr. Higgins), with whom I have sat on a number of Standing Committees, should have thought that I am so arrogant as to believe that every word I utter will become law. That is an attractive but unreal proposition.
I do not dissent in principle from what the hon. Gentleman said. It is very difficult to deal with these complex matters in the House and to take them all in when I have had relatively short notice of an amendment. I recognise that this matter may require further investigation. I hope that what I said was reasonably accurate and that it will not require any further amendment. I do not object to hon. Members looking at the matter

afresh. No doubt their Lordships will do that as well.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 3

STATEMENT BY SECRETARY OF STATE WITH RESPECT TO THE EXERCISE OF HIS POWERS IN RELATION TO A COMPANY IN LIQUIDATION, ETC.

'(1) Subject to the following provisions of this section, in the case of a company—

(a) which is a company in liquidation; or
(b) which is a company in financial difficulties within the meaning of section 16 of this Act in relation to which the Board have exercised any of their powers under that section or under section 15 of this Act;

the Secretary of State shall before the end of the period applicable by virtue of subsection (2) below lay before Parliament a statement with respect to the exercise of his powers under the Insurance Companies Act 1974 in relation to that company during the year ending immediately before the time mentioned below in this subsection.

The time referred to above is the beginning of the liquidation in a case falling within paragraph (a) above and the relevant time as defined by section 16(6) of this Act in a case falling within paragraph (b) above.

(2) The period applicable by virtue of this subsection is—

(a) in a case falling within paragraph (a) of subsection (1) above, the period of six months beginning with the beginning of the liquidation; and
(b) in a case falling within paragraph (b) of that subsection, the period of six months beginning with the date on which the Secretary of State receives written notification from the Board that they have exercised any of their powers under section 15 or 16 of this Act in relation to the company in question.

(3) Where by virtue of paragraph (b) of subsection (1) above the Secretary of State is required to lay before Parliament a statement with respect to the exercise of his powers under the Insurance Companies Act 1974 in relation to any company, that subsection shall not also apply by virtue of paragraph (a) thereof in the case of that company in the event of the company's going into liquidation.

(4) The Secretary of State shall not be required to include in any statement under this section any information which might in his view prejudice any criminal proceedings which have been or may be instituted against any person. '—[Mr. Clinton Davis.]

Brought up, and read the First time.

Mr. Clinton Davis: I beg to move, That the clause be read a Second time.
In Committee my hon. Friend the Member for Farnworth (Mr. Roper) moved a new clause requiring the Secretary of State to report to Parliament within six months of an insurance company going into liquidation or of the Board's incurring expenditure under its powers in Clauses 15 and 16. The report was designed to cover the circumstances in which the company had become a company in liquidation or in financial difficulties and the Secretary of State's discharge of his functions under the Insurance Companies Act in relation to the failed company.
I expressed doubts about the practicability of my hon. Friend's proposal in certain respects. I thought that a public report on the matters which would have to be specified could prejudice court proceedings which related to the personnel of the failed company or to the failed company itself. I thought also that a report of the scope which was contemplated could produce duplication and confusion with other statutory reports or investigations—for example, investigations being undertaken by the Official Receiver on which he would have to report to the court under Section 236 of the Companies Act 1948.
I undertook to my hon. Friend that I would examine the position afresh. This new clause endeavours to meet the point made by my hon. Friend and by other members of the Committee and at the same time to take into account the essential caveat I entered in that debate.
The main difference between the clause and my hon. Friend's proposition as drafted relates to the scope of the report. My draft confines the Secretary of State's duty to laying
before Parliament a statement with respect to the exercise of his powers under the Insurance Companies Act 1974".
That relates to the failed company in question. This will avoid the Secretary of State having to assume a responsibility to make a report relating to matters on which he will not necessarily be in a position to express a definitive and authoritative view—matters affecting his judgment. Clearly, it is this area which could lead to prejudicial matter being imported into court proceedings or which might conflict with the other statutory

processes to which have referred. The risk of prejudice with the new clause is much less than that which could have arisen with the old proposition.
The grounds on which the Secretary of State may exercise his powers of intervention include misconduct of a criminal nature by the company or by its officers; and publication of the fact that the Secretary of State had exercised his powers on these grounds could clearly be inimical to the interests of somebody who was having to stand trial in relation to such matters.
On the other hand, the clause places on the Secretary of State an obligation which the Standing Committee obviously felt he should assume—I think that it is a reasonable obligation—that, when an insurance company fails, Parliament should within a few months receive a factual account of the use that the Secretary of State has made in respect of the company of the extensive powers with which Parliament has provided him.
I shall not at this stage analyse the subsections of the clause. I hope that what I have said has indicated that we have tried to meet the principle that the Standing Committee was anxous to underline, and that the House will find my proposals acceptable.

Mr. Tim Renton: Fortunately, with this new clause we do not have any of the drafting or interpretative problems that we had with new Clause 2. Nor do we have any of the arithmetical problems which then arose. The only reference in this clause to a figure is the requirement that the statement should be made by the Secretary of State within a period of six months, subject to certain qualifications.
I think I speak on behalf of all of my hon. Friends when I say that we welcome the inclusion of the new clause in the Bill. In the light of the very extensive powers given to the Secretary of State by the Insurance Companies Act 1974, it is right that when a company has failed and when, sadly, the Secretary of State has had to exercise those powers, he should lay before Parliament a statement as set out in the clause.
The difficulty which was envisaged in Committee was that a situation could arise in which an insurance company got


into difficulties or was getting into difficulties but was then rescued and carried on trading without call on the industry levy. Some members of the Committee felt that if the statement to be made by the Secretary of State had to include a report of such situations this would undermine confidence in the continuing insurance company which had been through a bad patch but which had been rescued and was carrying on trading. This danger is avoided in the drafting of the new clause, and we are pleased to see it in the Bill.

5.0 p.m.

Mr. Roper: The new clause fulfils an assurance the Minister gave in Committee following a debate on a new clause put down by my hon. Friend the Member for Edmonton (Mr. Graham) and myself. I welcome the fact that the Government have gone a long way to meet us.
The argument for such a report is that any failure in the insurance industry indicates either a weakness in the insurance legislation, which is designed to prevent failures, or a weakness in the enforcement of the legislation. The new clause uses the word "statement" rather than the word "report" which was in the original new clause moved in Committee. I assume the two words are synonymous, but I would like an assurance that there is no distinction between them and perhaps the Minister would also say whether the word "statement" was chosen for any particular reason.
We realised in Committee that there might be a problem in publishing a report when criminal proceedings were pending because of the possibility of prejudicing them. Subsection (4) has been introduced in order to preclude that possibility. But will it be the intention of the Secretary of State, once proceedings have been completed, to make a further report including the information he would otherwise have laid before the House?

Mr. Clinton Davis: The use of the word "statement" in the new clause will enable the House to be informed in a number of ways with which my hon. Friend will be familiar. I hope that he will not think that there is anything sinister about the way in which the report will be made to the House. The essential feature is that the House will be informed.
When any criminal proceedings have been concluded, I am sure that the Secretary of State will feel obliged to provide the House with a statement of steps taken which, in fairness to the defendant, he would have been debarred from making earlier.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 6

REPORT BY SECRETARY OF STATE WITH RESPECT TO THE OPERATION OF THIS ACT

Within the period of six months beginning with 1st January 1981 the Secretary of State shall lay before Parliament a report reviewing the operation of this Act and its effectiveness as a method of protecting policyholders of authorised insurance companies carrying on business in the United Kingdom.—[Mr. Clinton Davis.]

Brought up, and read the First time.

Mr. Clinton Davis: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Oscar Murton): With the new clause, we may discuss the following amendments:
No. 2, in Clause 5, page 3, line 38, at end insert:
' and before 30th October 1979 '.
No. 3, in page 3, line 42, at end insert:
'and before 30th October 1979 '.
No. 4, in Clause 5, page 4, line 4, after '1974' insert:
'and before 30th October 1979 '.
No. 5, in page 4, line 6, leave out 'that date' and insert:
'29th October 1974 and before 30th October 1979'.
No. 15, in Clause 15, page 14, line 24, at end insert:
'and before 30th October 1979 '.
No. 17, in Clause 16, page 15, line 26, after '974' insert:
'and before 30th October 1979'.
No. 18, in page 15, line 28, leave out 'that date' and insert:
'29th October 1974 and before 30th October 1979'.

Mr. Higgins: On a point of order, Mr. Deputy Speaker. I notice that new Clause 6 has been starred on the Order Paper. It is apparently related to the subsequent amendments you have mentioned. May I have an assurance that, whether or not new Clause 6 is carried, we shall be able to have a vote on the other amendments?

Mr. Deputy Speaker: Perhaps I could give the hon. Member the answer to his question in a few moments. It is rather an abstruse point. I will give him an answer shortly.

Mr. Higgins: I am most grateful, Mr. Deputy Speaker.

Mr. Clinton Davis: A number of us are clearly in difficulty over this matter. I am happy to be able to chip in a few words while you are receiving advice, Mr. Deputy Speaker.
I think the best course for me to adopt in moving the new clause is to present the case fairly shortly, because the debate will, I suspect, range fairly widely over the likely efficacy of the Bill when it becomes law. I would wish to reserve some comments about the amendments.
From the beginning, there have been anxieties and doubts about the whole principle of this legislation. This has not been a party political matter. Anxieties have been expressed forcefully on both sides of the House and I know that a number of members of the trade union movement have also expressed concern. We have thought it right to proceed in this way because we believe it essential that policyholders, like those of the failed companies we have seen recently, should receive some help in their anxiety and distress. The Bill has been refined in a number of material respects, but the essential principle which we underlined at the outset has been maintained.
The amendments seek to bring the scheme to an end after five years. They appeared on the Order Paper at an earlier stage of the Bill's passage through the House. We believe that the doubts which underline them are unfounded. I had a long discussion with my hon. Friend the Member for Farnworth (Mr. Roper) on this matter and I believe that the provisions which are sought to be imported into the Bill through these amendments are unnecessary and wrong.
I know that some hon. Members have strong reservations about the Bill and I have sought to meet their anxieties by providing a procedure for reviewing the efficacy of the Bill after a reasonable period. That is the purpose of the new clause. It provides that the Bill will be reviewed after five years and that the results of such a review will be laid before Parliament so that hon. Members will be able to form a judgment based on practical experience of the legislation.
I believe that experience will indicate that we are right to have this long-stop measure. It was introduced because we were never sufficiently complacent to believe that, however sophisticated the regulations and surveillance we should be able to impose over the years, we should be able to guarantee that an insurance company would not get through a loophole.
In this respect I can do no better than quote the words of the right hon. and learned Member for Surrey, East (Sir G. Howe) when he spoke on the Second Reading of the Insurance Companies Bill. He said:
No conceivable system of supervision can provide a complete guarantee that there will be no failures even if deliberate fraud could be ruled out. It is inherent in insurance business that a view has to be taken of events in the future which must occasionally turn out to be wrong to a degree which defeats what appeared at the time to be prudent judgment."—[Official Report, 21st May 1973; Vol. 857. c 126.]
He was absolutely right in that assessment, and the Government share his view, which is why we introduced this long-stop measure.
It is right, however, to wait and see how it develops. It is right for a burden to be imposed upon the Government to indicate their views and make their recommendations, and for the House to pronounce upon the efficacy of the Bill after this period. I hope that my hon. Friends and other hon. Members will agree that the clause represents a reasonable effort to meet the reservations which have been expressed and that it goes as far as the Government can reasonably be expected to go in order to meet the spirit of Amendments Nos. 2 to 5 and 15, 17 and 18. I ask my hon. Friends to reciprocate the Government's sensitivity to the views of hon. Members by withdrawing the amendments, which the Government are unable to accept.
In particular I say this to my hon. Friends: there is one provision in the Bill which imports a novel aspect into the surveillance which will be undertaken. That relates to a provision to appoint a group of non-statutory advisers, which we shall be debating later. This is tremendously important. It represents a breakthrough, something which will be of positive help to the Government in exercising these important duties. If the Bill were to go at the end of the five-year period, that provision would go also. The ability to impart information to these advisers would necessarily cease. That is an important criterion to bear in mind. I ask my hon. Friends to consider that the Government have made a genuine effort to meet the anxieties expressed and that the provision of the review should go a long way towards meeting the objections which have been voiced.

Mr. Higgins: I had hoped that you might give us your guidance at this point, Mr. Deputy Speaker.

Mr. Deputy Speaker: It is imminent, but not quite ready. In the meantime I call the hon. Member for Windsor and Maidenhead (Dr. Glyn).

Dr. Alan Glyn: I am not quite clear on one or two points. I can see the case for reviewing everything in five years, and with that I completely agree. Obviously circumstances might change and the Minister might feel that the Bill has not worked out as well as he had expected. He then would lay a report before Parliament stating exactly how the machinery had worked in practice, but I am not quite clear whether that would mean an automatic termination of the Bill since there would have to be revising legislation. I presume that if there were to be revising legislation this Bill would have to be withdrawn and the new measures implemented through a fresh Act of Parliament.

Mr. Higgins: On a point of order, Mr. Deputy Speaker. I hope that we shall have your ruling on the question of the Divisions, because it is very difficult to debate a matter without knowing exactly what the voting position will be. I suspect that the Government amendment has been tabled with a view to frustrating the House expressing a view on the other

amendments. I hope that your ruling is imminent.

Mr. Deputy Speaker: I know the substance of it, but I am awaiting confirmation.

5.15 p.m.

Mr. Roper: I wish to concentrate my remarks on the amendments standing in the names of myself and my hon. Friends. As my hon. Friend the Minister said the amendments would limit the operation of the guarantee scheme to insurance company failures occurring within a five-year period starting on the day of the Queen's Speech last year when the Government first announced this legislation. I believe that there is satisfactory provision for a tidying-up period after the five years for any companies which have got into difficulties before the end of the period.
The amendments were put down in response to the serious concern expressed not only in this House but in another place because it was felt that the Bill did nothing to prevent reckless management practices by fringe insurance companies, practices which have led to the failure of several such companies in recent years. Instead it introduces a very unsatisfactory guarantee scheme providing an inadequate level of guarantee, and charges up the cost of providing that guarantee by way of a levy on policy-holders in sound and reputable insurance companies. These policyholders can in no circumstances—this applies particularly to those insuring with mutual or quasi-mutual companies—derive full benefit from the guarantee scheme.
The five-year limit has been suggested because during the next few years regulations made under the Insurance Companies Act 1974 will come into full effect. I believe that they will improve the protection given to policyholders by preventing some of the reckless management practices which have occurred in recent years.
Again, within the next four years, if the matter is pressed on with the determination which is necessary, it should be possible to introduce the new winding-up provisions for insurance companies to which the Secretary of State referred on Second Reading. He has admitted that the current unsatisfactory winding-up provisions have been responsible for so


much of the hardship to policyholders in the Nation Life and London Indemnity companies.
Given, therefore, that within five years there will have been substantive improvements in the protective legislation and in the winding-up arrangements, there seems very little need to continue this sort of back-stop guarantee scheme after 1979. If there is to be a long-term long-stop it should not necessarily be the unsatisfactory one which is incorporated in the Bill.
Numerous anomalies have been revealed throughout the Bill. Although attempts have been made in both Houses, and not on a party basis, to improve the Bill, I am convinced that serious anomalies remain. There may even be some that we have not yet discovered lurking in the more obscure passages.
There are anomalies in the scope of the guarantee. Some policies are covered, and others, for no good reason, are not. There are many anomalies in the basis of the levy. For example, there are the problems over pensions. Even if a pension scheme is insured under a master policy, it is not subject to the levy at all unless the insurance of the scheme is transferred to another insurance company, when the whole of the contributions paid to the pension scheme will become subject to levy.
Those were some of the points that we explored in some detail in Committee. Unfortunately, the Government have not been able to produce any amendment at this stage to cover such anomalies, concerning different implications for different pension schemes.
If an insurance company is constituted under the Companies Act its policy-holders are liable to levy. But a virtually identical insurance company registered as a friendly society—there is at least one substantial insurance company registered as a friendly society—is never subject to levy.
I could go on giving examples, but I shall not do so because the House wants to make progress. I believe that the Bill contains almost an infinity of anomalies, which seem to have arisen because of the absence of the necessary consultation between the Government and the industry and, in particular, the trade unions in the industry.
Therefore, it would be right for the Bill to have only a limited life, and then during the next few years proper consideration can be given to the extent to which the protective legislation is satisfactory to protect policyholders. Action can be taken to improve the present appalling winding-up laws, which have caused such hardship in the recent insurance company failures. If the necessity for it were shown to exist, a sensible form of guarantee scheme could be devised to cover the residual problems
That is why my hon. Friends and I tabled our amendments. Since we did so my hon. Friend the Minister has proposed an alternative remedy which he tells us will meet some of the problems that I have outlined, although I do not believe that he accepts that the problems are as grave as I have suggested. He tells us that the proposed report to be made after five years would assess the necessity for a continuing scheme, and discuss whether it was right. But before voting on the new clause we should have assurances about the nature of the report. First, we need a clear undertaking that it will include an assessment of the continuing need for such a scheme, and we need in the report an assessment of the effectiveness and fairness of the provisions of the Bill to do the job which might then need to be done, if it were shown that such a job remained
A firm assurance that the report would do that would go some way to meeting the point that we make in our amendments. We shall await with interest what my hon. Friend says when he winds up the debate.

Mr. Deputy Speaker: Perhaps I may now give my ruling on the point raised by the hon. Member for Worthing (Mr. Higgins).
New Clause 6, which is now under discussion, assumes that the Act will still be in operation in 1981, but the effect of the amendments would be to bring the effective life of the Act to an end in 1979. Therefore, the amendments would be inconsistent with the clause, should it be agreed to. Accordingly, they would fall, but it is in order for them to be discussed, as they are grouped with the clause

Mr. Higgins: I am most grateful for your ruling, Mr. Deputy Speaker. The


true intention behind the clause is becoming increasingly apparent in the light of what you have just said.
The effect of the amendments grouped with the clause would be to bring the operation of certain provisions in the measure to an end in 1979, two years before the projected review, but we all know that liquidations and other proceedings take a considerable time. Therefore, although no further new business was being taken on, the Board would presumably still be operating and carrying out its duties, if the amendments were accepted. If that is so, there is no reason why the proceedings should not be reviewed in 1981.
To make a second point, I do not see why we should say that a review cannot take place even though the Act has ceased to function.
However, it is on the first point that I seek your guidance, Mr. Deputy Speaker. It would seem that in fact various procedures will still be carried out under the Act by the time the review is due to take place. If so, I believe that the amendments would not fall. I shall be grateful if you will confirm that and that we can vote on Amendment No. 2 and the subsequent amendments, whether or not new Clause 6 is agreed to.
I should be grateful if you could also clarify the position if the clause is defeated. I presume that there would then be no doubt that we could vote on Amendment No. 2 and the subsequent amendments—but I do not want to weaken my case by making that suggestion.

Mr. Deputy Speaker: I find it much easier to answer the second point straightaway. If the new clause is defeated, of course there can be a Division on Amendment No. 2.

Mr. Higgins: I did not want to weaken my main point by making that helpful suggestion.

Mr. Deputy Speaker: I seized on it with alacrity while considering the hon. Gentleman's first point.

Mr. Moate: Further to that point of order, Mr. Deputy Speaker. The House is in some difficulty. It seems clear that the starred new clause has the effect of

depriving the House of an opportunity to vote on a matter of considerable importance to many hon. Members. An amendment was tabled in good time, and it is supported by hon. Members on both sides of the House, yet it would seem that the Government's tactics are to prevent a debate. Presumably a vote must be taken on the clause, because it is a new clause, before a vote on the amendments.

Mr. Clinton Davis: Further to that point of order, Mr. Deputy Speaker. There was no design on my part to frustrate debate on this matter. As the hon. Member for Worthing (Mr. Higgins) pointed out, the remedy is that if the new clause is defeated the House will proceed to a vote on the other matters.

Dr. Glyn: Further to that point of order. Because of winding-up procedures, certain of the amendments would still have an effect, and therefore would still be valid.

Mr. Deputy Speaker: I am advised that the report is to review the operation of the Act, and if the Act is not in existence I find it difficult to see how it could be reviewed.

Mr. Higgins: It could be done because various operations under the Act would still be continuing.

Mr. Moate: The Minister gave a helpful assurance that it had not been the Government's intention in tabling the new clause to deprive the House of an opportunity to vote on the other group of amendments.

Mr. Clinton Davis: I said that it was not our intention to deprive the House of a debate.

Mr. Moate: By implication, the Minister is suggesting that it was the Government's intention to deprive us of a vote. That is an unfortunate admission.
If the Government wished to be helpful, in order to allow full debate on the amendments they could withdraw the clause and reintroduce it in another form at another stage, because I imagine that the principle enunciated in the clause is unexceptionable and acceptable to the House.

Mr. Clinton Davis: I had no intention of frustrating the debate. If the House


deems it appropriate to reject the new Clause and to follow the advice just given by the hon. Member for Faversham (Mr. Moate), I cannot frustrate and would not wish to frustrate the House. It is not within my capacity to do so.

Mr. Deputy Speaker: We must try to be as clear as we can on this matter. If new Clause 6 is defeated, a vote will be allowed on Amendment No. 2. That is clear. But on the first point which was raised, I must adhere to the ruling that I gave earlier. The effect of the amendments would be to bring the effective life of the Act to an end in 1979. We must adhere to that ruling, because there is no alternative to it.

5.30 p.m.

Mr. Keith Stainton: I find myself still in a state of considerable confusion, in that proceedings may still be under way in the courts, in the manner mentioned by my hon. Friend the Member for Worthing (Mr. Higgins).
I am disquieted by many features of the Bill, and my perturbation is heightened by the tabling of new Clause 6. It is rare for a Government to show such humility as to offer to bring an enactment before the House for review five years later. It is not unique—we have had review situations in this Chamber from time to time—but it is unusual in a matter of this sort to find that the Government are not sufficiently resolute and convinced of what they are laying before the House to be able to say that they feel they have found a solution and that the proposals should be adhered to. I agree with the hon. Member for Farnworth (Mr. Roper) that there are many obscurities and contradictions within the legislation that we are being asked to press forward tonight.
New Clause 6 has particular reference to amendments which will be discussed later. The insurance industry and policy-holders in particular have over the past few years been given a number of assurances that all has been made well and that the doors have been barred and bolted. The Under-Secretary is shaking his head. I have here something written by the insurance correspondent of The Times in 1974:
Last year the Insurance Companies Amendment Act 1973 was rushed through

Parliament with the precise intention of preventing any further insurance company collapses in the wake of the Vehicle and General affair. The Scott Committee presented its report which was also designed to secure adequate safeguards for policyholders.

Mr. Clinton Davis: I do not know whether the hon. Member for Sudbury and Woodbridge (Mr. Stainton) was in the Chamber, but I cited his right hon. and learned Friend, who specifically asserted that there could be no guarantees given along the lines that are now being suggested.

Mr. Stainton: I am not asking for guarantees. In this life the unforeseen is all too likely to arise. But the policing powers have been given to the Department of Trade and the House has been repeatedly assured that they are more than adequate. I have had numerous meetings—not with the present incumbent in office but with various predecessors—and every time I have received these assurances.
We are told that the Act commands the wholehearted support of the Government, and that it follows from what was enunciated in the Queen's Speech, but then the Government say that it is proposed to have another look at it in five years' time. That can mean to me only that the Government have reservations about the contents of the Bill. I am glad that they have, because I think that it is monstrously wrongly written and conceived in many respects. My reservations, and the reservations of policyholders in general, are heightened not only by the content of new Clause 6 but by the manner and timing of its presentation to this Chamber.

Mr. Higgins: Naturally, we accept your ruling, Mr. Deputy Speaker, on the point raised with you earlier, but I should like to stress, as strongly as I can, that there have been very grave doubts expressed on both sides of the Chamber and on both sides of the Committee as to the whole of the Bill. It has now been radically changed compared with the form in which it was first introduced. Despite the immense amount of effort hon. Members have put into improving it, it still contains, as has been pointed out, a great many anomalies with regard to the scope of the guarantee, the position of friendly societies, and so on.
We recognise that the present state of the law is imperfect. We need a better set of regulations, and they should be brought in with the greatest possible speed. The Bill is not a Policyholders Protection Bill but a Bill to protect Ministers and civil servants, as has been repeatedly stressed. It contains a great many imperfections and a great many anomalies. That being so, one would have thought it appropriate to put a time limit on the Bill. The amendments are, if anything, related to too long a period. I hoped that we could see how it worked, and that, as a result of improvements in the law or otherwise, these provisions might wither away—an expression not unfamiliar to Labour Members—and we could then get down to a more sensible basis.
I recommend my hon. Friends to support the proposals that the Act should expire by 1979. That is what I had every intention of doing and still hope to do this evening, because the Government would then have to look at the whole thing afresh and bring in new legislation in the light of experience. What has happened instead is that the Government have tabled, at the last minute, a starred amendment to a Government Bill—a new clause proposed by the Secretary of State. It is a shabby device to prevent the Government from being defeated on the other amendments that have been put down.

Mr. Clinton Davis: That is a figment of the imagination.

Mr. Higgins: It is not a figment of the imagination. There is no other reason why it should be made a starred amendment at the last minute. That being so, the right course of action is to vote against the new clause. It is inadequate. All that is proposed is that there should be a simple review of the operation of the Act. There is no question, as in the other amendments, of the Act being terminated and the matter looked at afresh. It is not to happen until 1981, which is a long way ahead. I do not feel that the new clause produces anything of much worth. On the other hand, the amendments—which will fall if the new clause is carried—are of value, for all the reasons advanced by hon. Members on both sides of the House.
I hope, therefore, that my hon. Friends will oppose the passing of new Clause 6, and that if we succeed in defeating it we shall support the other amendments on the Order Paper. You, Mr. Deputy Speaker, have already said in your ruling that it would be in order then to vote upon them.

Mr. Moate: I endorse what has been said about the tactics employed by the Government in putting down the new clause in this way. It is most unfortunate, because it has introduced a quite unnecessary note of acrimony. It is unfortunate also because it will possibly deprive the House of the opportunity to make two quite useful amendments to the Bill. The two do not conflict. It would have been helpful to have a review in the context of a report to Parliament later. We might now be presented with the necessity to defeat that proposition. It would not have been incompatible with a five-year limitation to the operations of the Bill. But the way in which the Minister has tabled this amendment means that we all lose, and this is to be regretted.
Nevertheless, I agree that by voting against the Government's new clause we are not depriving ourselves of a provision which is of any significance. It is an attractive idea. It does not embody any necessity for parliamentary approval of the report. It is seven years away. It was tabled as a feeble attempt to head off those Government supporters who had tabled a very worthy amendment. I added my own name to the list of those supporting the amendment which proposed to limit the Act to a life of five years, though I voted against the Bill on Second Reading because I was not convinced that it would be good even for five years.
It is a bad Bill. It will encourage the reckless, discourage the prudent and penalise the provident. Primarily, it protects the civil servants. For the victims of insurance company collapses it is an inadequate and leaky lifeboat.
It would be better limited to five years than to have it permanent. There are strong reasons for a five-year limitation. In that period, we are likely to see evolved further regulations under the Insurance Companies Act 1974, and those should tighten up any loopholes which exist.


More important, the intervening period can be used to tidy up the winding-up and liquidation arrangements which have been seen to be grossly unsatisfactory.
All this can happen in the next few years. For that reason, it would be logical to review the Act in five years. Limiting it to a five-year life does not mean that a future Parliament cannot re-implement it if necessary. Therefore, it is not a wrecking amendment. It provides an opportunity in five years to review the Act and to see how it has operated.
I hope that the House will oppose the Government's clause simply because, otherwise, we should be deprived of an opportunity to vote on very worthy amendments which provide a time limit to the Bill.

Mr. Richard Wainwright: I wish to make it clear that the reason why my hon. Friends and I propose to vote against the new clause is not that we have any quarrel with the clause but that to attempt to defeat it is the only way open for us to debate the very significant and worthy amendments tabled by the hon. Member for Farnworth (Mr. Roper) and others of his hon. Friends.
For that reason alone we Liberals intend to vote against the Government's clause.

Dr. Glyn: rose—

Mr. Deputy Speaker: I understand that the hon. Member for Windsor and Maidenhead (Dr. Glyn) has already contributed to this debate. It is not possible for him to speak twice.

Dr. Glyn: By leave of the House.

Mr. Deputy Speaker: I am afraid not even by leave of the House.

5.45 p.m.

Mr. Clinton Davis: I deal first with the assertion that the Government have engaged in a shabby manoeuvre to frustrate debate. Clearly it is a reflection of the stiffening resolve imposed on the hon. Member for Worthing (Mr. Higgins) by one of his right hon. Friends arising out of the conference that they had recently.
It has to be remembered that we are dealing here with a series of amendments tabled only on Monday. Obviously I

had to consider the situation. The hon. Member for Worthing has given me no credit for that at all. He has embarked upon his usual nit-picking exercise which is totally characteristic of him. In fact, it was quite reasonable for the Government to discuss with my hon. Friend the Member for Farnworth (Mr. Roper) the principles behind the position. We did that, and there was nothing illegitimate or surreptitious about it. I resent and reject the charge made by the hon. Member for Worthing.
My hon. Friend the Member for Farnworth has been obliged to leave the Chamber to attend a Committee meeting. He has asked me to give certain assurances about the nature of the report. I give those assurances without hesitation because anxiety has been expressed, some of it misplaced, and it is therefore incumbent upon my right hon. Friend to provide a full review of the operation of the Act within the period stipulated in the new clause.
My hon. Friend the Member for Farnworth asked me for an assurance that the report would include an assessment of the continuing need for the scheme. I give that assurance. He asked for there to be included in the report a review of its effectiveness and its fairness. That will be included in the report. So I meet the points which have been made by my hon. Friend.
My hon. Friend said that the Bill as such did nothing to prevent reckless management practices. I have never hidden the fact that the first line of defence is a suitable and increasingly sophisticated system of surveillance—

Mr. E. Fernyhough: And the integrity of companies.

Mr. Davis: Certainly. The purpose of this improving system of regulation is to establish those criteria which my hon. Friend the Member for Farnworth asked us to meet. I could go through the regulations that we have introduced already. They follow, on a totally non-party basis, from the Act introduced by the previous administration. We have a series of further regulations which we shall be introducing. We are by no means complacent—

Mr. Arthur Lewis: We have had dozens of regulations before.

Mr. Davis: No. The purpose of the 1973 and 1974 Acts was to invest my right hon. Friend with the power to produce these regulations. It was recognised that they were inadequate, and increasing experience shows more and more that they are.

Mr. Arthur Lewis: In his Department, my hon. Friend will find files inches thick of documents in which I and other hon. Members have asked Governments of both parties year after year, to take action against dozens of these companies which have filched money from the pockets of ordinary people. My hon. Friend's Department has done nothing. The matter has been brushed under the carpet in the hope that it would be forgotten. Cases have been occurring year after year, and all that we have is more and more regulations.

Mr. Davis: I know that when my hon. Friend writes to the Department the relevant file is likely to achieve the proportions that he has indicated. But it is a gross slander on my officials, who have served Governments of both parties, to allege that they have taken no action.

Mr. Arthur Lewis: What about Lonrho?

Mr. Davis: I can point, as I did on Second Reading, to the number of times that action has been taken to deal with companies in respect of which we have had suspicions. It has been effective action, and it will be increasingly effective action. At present we do not have a sufficient system of surveillance which will guarantee or come close to guaranteeing the sort of situation which the hon. Member for Sudbury and Woodbridge (Mr. Stainton) was envisaging. The right hon. and learned Member for Surrey, East (Sir G. Howe) said precisely the same—namely, that there can still be loopholes.
It is not always possible to foresee the devices which can be employed in avoiding legislation. I have been asked why I do not have more confidence in the Bill and say that it is bound to work. In my view that would be a thoroughly complacent and arrogant attitude to take. I believe that the Bill represents an essential long-stop, but the first line of defence must be regulations, and they must necessarily be the subject of detailed consulta-

tions with the industry. We shall now have the benefit of these additional consultative procedures. I hope that the regulations will be brought into force so that we can try to avoid as best we can the situation developing along the lines about which concern has been expressed.

Mr. Stainton: I hope that the Minister will concede that I would not be so precocious or presumptuous to say that anyone could get every piece of legislation absolutely right, especially when it is as complex as this Bill. I hope that it is absolutely clear to the Minister that I am fed up beyond the point of exasperation with tripping down to No. I Victoria Street since the mid-1960s on such matters as the Dover plan and the like, meeting posses of officials in the Department as well as the Minister's own contemporaries and those who preceded him. It is just not good enough. There are so many anomalies that one wonders whether, in tabling the review clause, the Government are indicating their continuing doubts about the situation.

Mr. Davis: The Government are saying that the House is entitled to information because both in the House and outside anxieties have been expressed. It is reasonable to accommodate those anxieties, and that is what we have been trying to do. The hon. Gentleman has on no occasion that I can recollect—I shall apologise if I am wrong—come to see me about any specific problem which he has had in this respect.
I do not recall that my hon. Friend the Member for Newham, North-West (Mr. Arthur Lewis) has come to see me at No. 1 Victoria Street regarding any of the problems about which he has been concerned. I believe that he has written to me on one or two occasions, but I do not think that his correspondence has reached the sort of proportions he was trying to illustrate.

Mr. Arthur Lewis: My hon. Friend must look up the files. I became so fed up year after year getting nowhere with the various Ministers that I thought it was hopeless to try him. I must apologise to my hon. Friend. From my experience the same civil servants give the same answers.

Mr. Davis: My hon. Friend should be a little more optimistic and confident


in the present incumbents in office. I hope that what I said will not encourage him to make too many visits, but at least I am not preventing him from making one.

Mr. Arthur Lewis: It will not happen now.

Mr. Davis: I believe it is important to proceed with a proper system of regulation, and I undertake that my Department will do that. However, it is unfair and somewhat illogical to seek that the Bill should come to an arbitrary end after a period of five years. Why choose five years? Why not three, seven or ten years? There has been no justification for that suggestion from those who have proposed it. If they are right in their belief that after 29th October 1979 there will be no more failures, there is no loss to the policyholders of safe companies in letting the Bill run on. On the other hand, if they turn out to be mistaken and my view happens to be right, that despite improved supervision there may still be occasional instances of companies falling through the net—

perhaps some which have failed through no one's fault, but the difficulties which we experienced in 1974–75—it will be the policyholders of those companies who will suffer from what I consider to be an error of judgment.

Dr. Glyn: I raised this question earlier. I understand that if the new clause is passed we are precluded from discussing the amendments. Am I correct in saying that if the Bill becomes an Act it will remain an Act until such time as the Government bring in a new Act either to amend it or to abolish it?

Mr. Davis: The hon. Gentleman is right. It is wholly unrealistic to take the attitude that the hon. Member for Worthing has taken. The action which we are envisaging is fair to the House and to the country. I hope that the House will endorse it.

Question put, That the clause be read a Second time:—

The House divided: Ayes 133, Noes 115.

White, Frank R. (Bury)
Wise, Mrs Audrey



Willey, Rt Hon Frederick
Woodall, Alec
TELLERS FOR THE AYES:


Williams, Alan (Swansea W)
Young, David (Bolton E)
Mr. James Hamilton and


Williams, Alan Lee (Hornchurch)

Mr. Thomas Cox.




NOES


Aitken, Jonathan
Hawkins, Paul
Reid, George


Arnold, Tom
Higgins, Terence L.
Renton, Rt Hon Sir D. (Hunts)


Atkins, Rt Hon H. (Spelthorne)
Hordern, Peter
Renton, Tim (Mid-Sussex)


Bain, Mrs Margaret
Howell, David (Guildford)
Rifkind, Malcolm


Banks, Robert
Howells, Geraint (Cardigan)
Roberts, Michael (Cardiff NW)


Bell, Ronald
Hurd, Douglas
Ross, Stephen (Isle of Wight)


Berry, Hon Anthony
Hutchison, Michael Clark
Rost, Peter (SE Derbyshire)


Biffen, John
Irvine, Bryant Godman (Rye)
Sainsbury, Tim


Biggs-Davison, John
James, David
Shepherd, Colin


Bottomley, Peter
Jessel, Toby
Shersby, Michael


Braine, Sir Bernard
Knight, Mrs Jill
Sims, Roger


Brotherton, Michael
Knox, David
Sinclair, Sir George


Budgen, Nick
Lane, David
Smith, Cyril (Rochdale)


Butler, Adam (Bosworth)
Latham, Michael (Melton)
Smith, Dudley (Warwick)


Carlisle, Mark
Lawrence, Ivan
Speed, Keith


Channon, Paul
Lawson, Nigel
Spicer, Jim (W Dorset)


Clark, Alan (Plymouth, Sutton)
McAdden, Sir Stephen
Steen, Anthony (Wavertree)


Clark, William (Croydon S)
McCrindle, Robert
Stewart, Ian (Hitchin)


Cooke, Robert (Bristol W)
Macfarlane, Neil
Stradling Thomas, J.


Cope, John
McNair-Wilson, M. (Newbury)
Taylor, Teddy (Cathcart)


Costain, A. P.
Mather, Carol
Tebbit, Norman


Douglas-Hamilton, Lord James
Mayhew, Patrick
Thatcher, Rt Hon Margaret


Dykes, Hugh
Meyer, Sir Anthony
Thompson, George


Emery, Peter
Miller, Hal (Bromsgrove)
Thorpe, Rt Hon Jeremy (N Devon)


Farr, John
Moate, Roger
Townsend, Cyril D.


Finsberg, Geoffrey
Molyneaux, James
Tugendhat, Christopher


Fisher, Sir Nigel
Morgan, Geraint
Viggers, Peter


Fookes, Miss Janet
Morrison, Hon Peter (Chester)
Wainwright, Richard (Colne V)


Fowler, Norman (Sutton C'f'd)
Mudd, David
Wall, Patrick


Fox, Marcus
Neave, Airey
Warren, Kenneth


Freud, Clement
Neubert, Michael
Weatherill, Bernard


Gardiner, George (Reigate)
Newton, Tony
Welsh, Andrew


Gardner, Edward (S Fylde)
Osborn, John
Wilson, Gordon (Dundee E)


Glyn, Dr Alan
Page, Rt Hon R. Graham (Crosby)
Winterton, Nicholas


Grant, Anthony (Harrow C)
Pardoe, John
Young, Sir G. (Ealing, Acton)


Grimond, Rt Hon J.
Penhaligon, David



Grist, Ian
Percival, Ian
TELLERS FOR THE NOES:


Hall-Davis, A. G. F.
Peyton, Rt Hon John
Mr. Spencer Le Marchart and


Hamilton, Michael (Salisbury)
Raison, Timothy
Mr. Richard Luce.


Hannam, John
Rathbone, Tim

Question accordingly agreed to.

Clause added to the Bill.

New Clause 5

LEVIES FOR ADMINISTRATIVE PURPOSES TO BE SUBJECTED TO PARLIAMENTARY APPROVAL

'No levy shall be imposed under section 19(1) or (2) of this Act for the purpose of financing expenditure incurred by the Board by way of administrative expenses in performing their functions under this Act until approval thereto has been given by resolution of each House of Parliament'.—[Mr. Moate.]

Brought up, and read the First time.

Mr. Moate: I beg to move, That the clause be read a Second time.
I have tabled this clause not in any sense of belligerence to the principles of the Bill but more, as always, as a humble seeker after truth as to how the Bill is to operate in certain vital respects.
Within the Bill there is a great deal of description of the Policyholders Protection Board. We are informed that the Board will consist of five people who will be paid remuneration and reimbursed expenses.
It is probably safe to assume from what we have heard that the Secretary of State will be taking fairly early steps to appoint the Board, presumably regardless of whether any insurance companies are in difficulties and whether they suspect that it will be brought into operation imminently. Therefore, immediately the Bill becomes an Act, presumably expenses will be incurred by way of the administration or remuneration of the Board.
My object is to ascertain how and when the Board is to be established, how its expenses are to be met, and how, if at all, it is to be staffed. I hope that the Minister will be able to, give me some precise answers, because it would be helpful to the industry and to the public


at large to have some idea about the mechanics of the operation.
I mentioned staffing, which raises questions about the nature of the Board. I understand that there has been little debate so far about the type of point that I am putting. Is this Board to be entirely independent of the Government with a separate office and staff, or is it to be an adjunct of the Department of Trade to be activated only when the Secretary of State demands? I find something unattractive about the idea of this group of important men sitting on a Board which will be brought into life by the Secretary of State only if he considers that a particular need exists. If the Board is not prepared for the shock of meeting the Secretary of State it might not be in a position to do a very good job of work. If the Board is to have any useful purpose it must be aware of events as they developed. Presumably it must have an office. If it is to have an office and staff, who is to pay? I see no Money Resolution relating to the Bill. Where is the money to come from?
On examining the Bill we find in Clause 17 that the Board may recover from its levies any expenditure incurred by it by way of administration. It would seem that levies will have to be raised immediately to finance the Board's bureaucracy. Alternatively, I suppose it could use its loan powers to raise the money. As I understand it, those powers exist only in anticipation of the levies that will subsequently have to be raised.
That leads me to the crux of the matter. It is generally understood that the levies will be called for only in the event of a collapse or to help avert a collapse. It will be a matter of great surprise to the industry and to policyholders if they are told that a levy will have to be raised on all policies to meet the annual administration expenses of the Board. Maybe we shall be told that there are to be no administrative expenses. That makes the Board a strange and unarmed weapon. It is important for us to know the answers to the questions I have posed.
I return to a number of questions. First, where is the money to come from to finance the Board's expenses? Assuming for the moment there is no actual or imminent collapse of an insurance company, will the Minister make it clear

how these comparatively modest sums are to be collected from the industry?
If no expenditure is to be incurred, how is the Board to be constituted? I hope that it will not be a Board that is to be brought into life at the behest of the Department of Trade. If that were so, all that would happen is that the officials would have taken so many steps along the road to liquidation, or would have been involved in it to such an extent, that it would become impossible for the Board's members to act in any other way. That would set the Board on an irrevocable course of action.
If the Board is to have no resources and if it is to be merely an extension of the Department, an extension of the Minister's powers, I fear that it will be a case of the blind leading the blind. My main object is to seek information about the mechanics of the Board's operations. I believe that the clause has merit in its own right in as much as it states quite clearly that no levy shall be imposed for the purpose of covering the administrative expenses of the Board. I believe that to do otherwise would be an objectionable proposition to put to policyholders and the insurance industry.

Mr. Clinton Davis: I am grateful to the hon. Gentleman for enabling me to have this opportunity to say one or two things about the Board. It is clear, notwithstanding the hon. Gentleman's concluding remarks, that the proposal he is putting before the House is largely by way of probing the situation. I have always recognised the hon. Gentleman as a humble seeker of the truth. On one or two occasions I have joined him on similar exercises, but we were frustrated.
6.15 p.m.
The object we have in mind in establishing the Board is that it shall be brought into effect as soon as possible after this measure receives the Royal Assent. We can then consider the appointment of members of the Board. The hon. Gentleman will recall that we have given an assurance that the majority of the Board's members will be drawn from the senior officers of insurance companies. That in itself will indicate the way in which the Board is to be administered. The Board will not be dealing with Government moneys, as such.


Therefore, there is no purpose in a money resolution. As the hon. Gentleman put it, that is the way in which the Board will be kissed into life. I am not sure that I would have used that expression myself, but there it is.
The Board will be independent of the Government. It will not be an adjunct of the Department of Trade. I understand that the BIA has indicated that, initially, it is prepared to bear certain staffing and office administration expenses, but those expenses are not likely to be substantial. I am grateful to the BIA for having made that suggestion. Those expenses will not be met from any levies.
The Board will operate only when there is a failure. Indeed, there will be no need for it to meet or to undertake any duties unless there is a failure. On the basis of that assurance, I hope that the hon. Gentleman will feel it unnecessary to pursue the clause to a Division. I hope, too, that he will agree that we have had a positive response from the BIA.

Mr. Higgins: The House will be grateful to my hon. Friend the Member for Faversham (Mr. Moate) for tabling the clause. I believe that it has clarified a number of points which, despite our intensive deliberations in Committee, did not emerge very clearly before. The Under-Secretary of State has said that the Board will meet only if there is a failure of an insurance company. Am I wrong in supposing that it will also need to consider the whole procedure of rescues or liquidations? Am I right in thinking that it is not only in the event of a failure that the Board will have some task to perform? I may have misunderstood, but was the hon. Gentleman saying that the Board will never meet unless a failure has taken place? That was not my understanding of the way in which it was to operate.
My second point is that, in a sense, the answer which my hon. Friend received from the Minister was surprising. My hon. Friend is right to be concerned about the fact that a levy might be raised, even though no failure has taken place and although there is no expectation of such an event. The arrangements that the hon. Gentleman has suggested and

welcomed seem to be rather unorthodox although, as he points out, no money resolution has been made to provide finance to cover the Board's operations. However, on reflection, does the Minister think that that which is before us is a satisfactory arrangement? Is there any precedent for financing the work of a Board set up by statute in this way? It seems to be a somewhat unsual arrangement.

Mr. Robin Maxwell-Hyslop: It occurs to me that if the expenses which fall on the BIA achieve any magnitude there will be an incentive for fringe companies not to belong to the BIA, bearing in mind that membership is not compulsory. In that way they will avoid having to contribute towards the expenses of the Board.

Mr. Clinton Davis: The point that has been made by the hon. Member for Tiverton (Mr. Maxwell-Hyslop) is so unlikely as hardly to merit a reply. The expenses that will be involved initially will be so minimal as to have no impact upon the sort of situation of which he has spoken.
The hon. Member for Worthing (Mr. Higgins) asked me one or two questions about the Board. He suggested that it will be an unorthodox situation, and unprecedented. That may be so, but that does not demonstrate that it is a bad idea. The fact that we start with a new idea is not necessarily a disadvantage. Clearly someone has to start new ideas. I repeat that the BIA has undertaken something for which I am most appreciative-namely, the initial expenses.
I want to clarify one point that was raised. Perhaps I inadvertently misled the House—and I do not wish to do that. The Board may think it appropriate to meet informally to discuss the possibility of its functioning and how it can go on functioning in the event of a collapse, but it would not be called upon to undertake its statutory functions unless there were a failure. That is the point that I was seeking to make.
I imagine that individual members of the Board would want to meet. Where they meet is a matter for them. I do not prescribe any limits. They may wish to go to Locketts, where they have duckling, in the manner of Shrewsbury. I was


asked how that was done, and the question was answered by my hon. Friend the Under-Secretary of State for Industry—the hon. Member for Manchester, Ard-wick (Mr. Kaufman)—who said it is picketed. They will be able to rejoice wherever they wish. I hope it is clear that no matters of any substance are envisaged.

Mr. Moate: I am grateful to the Minister for having clarified the method by which the Board will be established, the timing, and how it will be financed, but I am a little bemused by his answer. I do not necessarily find unwelcome this unorthodox arrangement for a statutory board to be dependent for its lifeblood upon a commercial organisation, but some members of the BIA may be a little surprised at what has been announced. I do not know the views of the majority of the members, but one or two are by no means sympathetic to the idea of there being such a Board, and they might see this as their association nursing a viper in its breast, but no doubt once the Board is established they will extend to it their hospitality and give it the benefit of their considerable expertise.
There is a certain area of confusion between the statutory powers of the Board and the information that it will receive. One would assume that if the Board is to meet from time to time within the BIA it will be given a great deal of research facilities and information from the BIA. It may be that not a great deal of thought has gone into the mechanics of the operation and that, understandably, the Minister has been concerned with the principles of the legislation. Perhaps this has not been thought out as clearly as the Minister would like it to be when the Bill proceeds further.
It worries me that the Board will incur only minimal expense. I am in favour of all boards incurring little or no expenditure, but in this case the Board will have no staff. It will have no resources to gain any independent knowledge of what is happening in the insurance market. On the other hand, if the Board is well informed it will be because of individual members' expertise, or because knowledge has been passed on by the BIA. Bearing in mind the criticism levelled at the BIA when the insurance companies put up slogans such as "Get the strength of British insurance round you", people

will be surprised that it is the BIA that is putting its strength around the Policy-holders Protection Board.

Mr. Clinton Davis: Members of the Board must seek their information and research as widely as they can, and no doubt the BIA, the Department and their own expertise will be of considerable assistance to them.

Mr. Moate: On balance, I am attracted by the Minister's reply. It is a welcome re-establishment of relationships between this new statutory Board and the BIA. Nevertheless, it raises certain interesting questions, which we may have to examine when the operations commence. In view of the answers that have been given, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

THE POLICYHOLDERS PROTECTION BOARD

Amendment made: No. 1, in page 2, line 12, leave out from 'impose' to 'in' in line 14 and insert:
'levies, in accordance with section 18 below, section (The exempt income level for the purposes of section 18) of this Act and section 19 below and Schedules 2 and 3 to this Act, on insurance companies and other persons engaged in the insurance industry'.—[Mr. Clinton Davis.]

Clause 5

APPLICATION OF SECTIONS 6 TO 11

Mr. Robert Taylor: I beg to move Amendment No. 50, in page 3, line 41, leave out '29th October 1974 'and insert' 1st June 1974 '.

Mr. Deputy Speaker: With this we are to take the following amendments:
No. 51, in page 4, line 6, leave out 'that date' and insert '1st June 1974';
No. 14, in Clause 15, page 14, line 24, leave out '29th October' and insert '1st June';
No. 16, in page 14, line 30, after 'liquidation' insert:
'(provided that the petition for the winding up of the company which led to the liquidation was presented on or after 1st June 1974)'.

Mr. Taylor: These amendments have the common purpose of seeking to backdate the starting day to include the unfortunate policyholders of Nation Life. I am assured by the Public Bill Office that all four amendments are necessary to achieve that object, and I am grateful to Mr. Speaker for grouping the amendments together. I am grateful, too, to the Under-Secretary of State who wrote to me telling me that my original amendment was unsatisfactory.
This is the third occasion this year on which we have had an opportunity to debate the insurance industry, and on each of the two previous occasions Nation Life figured considerably in our discussions. I make no apology for raising this subject for the third time today because this is the first occasion on which the House has had an opportunity to say whether it is in sympathy with those policyholders.
On Second Reading, when I last spoke of this issue, the Under-Secretary of State accused me of inconsistency. He said:
I have never known anybody stand on his head so publicly as the hon. Gentleman has done."—[Official Report, 18th July 1975; Vol. 895, c. 2019.]
The hon. Gentleman will recall that I sought to intervene at that moment, believing that an attack like that would give one an opportunity to reply, but he would not give way. In case the hon. Gentleman adopts that tactic again today let me tell him that the fact that my hon. Friend the Member for Faversham (Mr. Moate) and I were the only two Members from the Opposition benches to vote against the Second Reading of the Bill, and the fact that I subsequently advocated the back-dating of the Bill to include Nation Life, does not seem to be in any way illogical, and I am prepared to defend it.
If one detests the idea of successful companies having a levy thrust upon them to protect those companies that are less successful it is still logical, if that system becomes the order of the day, for somebody who opposes it to say, "Very well, if it is the law of the land, do not let us leave out a group of people because their birthdays occurred a matter of weeks before the Government decided on this course of action". The Government have never really made clear why they object

so violently to Nation Life being included within the Bill. One presumes that the objection is on the basis that to do that would make the Bil retrospective. Therefore it is obligatory on me to try to answer that point. The Bill is, to a certain extent, retrospective, because if we pass it during the next few days it will be back-dated to October of last year.
The point, supported by all those hon. Members who signed my Early-Day Motion, is that in the early days after Nation Life had run into trouble and a liquidator was necessary there was a time when it was decided that the insurance industry itself would come to its rescue, but there is always a lull between the event and the insurance industry making a decision on matters of this nature, because the total liabilities compared with the assets must be investigated. The industry could not suddenly commit its members to substantial sums without first ascertaining what those sums amounted to.
Very quickly after Nation Life collapsed the Government announced their decision to help companies in such periods of difficulty. That pre-empted the need for the industry to take action. Certainly it introduced a period of uncertainty.
6.30 p.m.
That was the point of the Early-Day Motion which has given rise to this debate. It was signed by 211 Members up to yesterday, and I am glad to see that another Labour Member signed it last night. It says:
That this House believes that the uncertainty of the Government's intentions and proposals for the insurance industry is positively harmful to the prospects of Nation Life policyholders due to the unlikelihood of any remedial action by the British Insurance Association during the period of uncertainty".
That was not meant as a criticism of the Government. There must be a period of uncertainty between a Government announcing their intention and producing detailed legislation. It was a statement of fact. There were substantial grounds for believing that some of the unfortunate policyholders of Nation Life would have found support from the insurance industry but for the fact that the Government announced that they would intervene in this sphere of our commercial life.
There is another point, which I have raised on this issue before, that my hon. Friends and hon. Members opposite who object to the retroactive part of the amendment should search their minds for justification of their attiude when they did not vote against the Air Travel Reserve Fund Bill which was retroactive for the Court Line holidaymakers.
I have heard the Under-Secretary's excuse for that different approach. He has said before in our insurance debates that the people involved in the Court Line collapse had felt that they were protected by the Civil Aviation Authority. If that was so, how much more did the people who put their life savings into an insurance company believe that they were protected by the supervision of the Department of Trade? How can anyone who did not vote against the previous Bill not help the small savers involved in this amendment?
Some of my hon. Friends have said that the amendment will cost the industry a good deal of money. The Policyholders Protection Board will be able to scale down the repayments if it believes that the offers are too attractive to be realistic. As we have heard, the membership of that Board will have a majority from the industry. I do not suggest that the policy-holders of Nation Life should get anything like 90 per cent. I believe that the payment should be in the region of 75p in the pound, which is the net sum of the assets.
What is important is that many of these savers are elderly and do not have a lot of time to wait. In a letter as recently as 22nd September the Under-Secretary of State wrote to one of my hon. Friends:
The liquidation may take a number of years to conclude".
He is saying, therefore, that many of the small savers who invested in Nation Life have no chance of seeing the balance of their money, even up to the agreed net asset figure. This is the only chance that the House will have to help those who were trapped in the collapse of Nation Life.
It is interesting to note that on 7th March the hon. Member for Aberdare (Mr. Evans) said:
I have already said that we have the problem of Nation Life before us, and I know that we have undertaken to do something about

it."—[Official Report, 7th March 1975; Vol. 887, c. 2015.]
When he used the word "we", presumably he meant the Government. That was certainly an encouragement to the 32,000 people who lost their savings. Since that date, so far as I can discover, the only thing that the Government have done is lay the Statutory Instrument which appeared this month and which will enable them to claim not the agreed fee of £280,000 from National Life but an increased figure of £350,000. That is the only action taken in spite of that clear statement which was read by every Nation Life policyholder.
I repeat, this is our only chance to correct that situation. It is right that the House should do it, because it is totally unfair to say that we should exclude them on the grounds of the passage of a few weeks. I believe it to be the sense of the House that these amendments should be passed.

Mr. Ian Stewart: I accept that it will be argued that there are aspects of this legislation which, if the amendments are passed, will act to the detriment of policyholders of other insurance companies, but despite the technical and legalistic arguments which can be advanced for resisting the amendments, there is one absolutely crucial underlying point of equity which marks this case out for special treatment.
Over a number of years, successive Governments have failed properly to exercise their powers of supervision over insurance companies. There has been a growing awarenes of this fact among the public, and the collapse of a number of companies last year brought the matter to a head. At that stage, the Government indulged in some thinking out loud, as my hon. Friend the Member for Croydon, North-West (Mr. Taylor) said in his able speech. They indicated that they would take measures to deal with the situation which arose from the collapse of Nation Life—by implication, if not specifically. The date chosen for the operation of the Bill was that of the Government's announcement of the legislation. That is the normal procedure, but it ignores the fact that, over a considerable period, support for insurance companies and their policyholders had been understood, even if incorrectly, to be a Government responsibility.
The Under-Secretary said an hour or two ago, in another context, that the powers of supervision had been exercised effectively, but added that if the Bill were enacted they would be exercised increasingly effectively—suggesting that they were not wholly effectively exercised before.

Mr. Clinton Davis: The hon. Gentleman should recognise that the Department of Trade, through successive administrations, can act only within the parameters of its legal powers, those powers having been conferred by Parliament in legislation or subordinate legislation.

Mr. Stewart: I accept that point, but what I am trying, obviously inadequately, to express is the view that there was a general public belief about the situation of insurance companies and the Government's responsibility, which makes the Government's choice of a particular moment an arbitrary one in relation to those in similar circumstances who had taken out policies with a number of different companies. The fact that a company happened to fail before or after a certain date is, therefore, an arbitrary and damaging occurrence for a particular group of policyholders.
It should be said that every constituent of mine who has been a policyholder in Nation Life and has written to me does not in any way fall within the category of professional investors looking for relief from tax liability. There was an article in the Press a few days ago in which it was stated that the hon. Member for Bethnal Green and Bow (Mr. Mikardo), in answer to a constituent, drawing on a reply from the Secretary of State, had implied that these people were of that type. Certainly, that is not the experience of myself or my hon. Friends with whom I have discussed this matter.
It is possible to look at this case from two different points of view. One is the strict legalistic way—that retroactive provisions of this kind are not acceptable. Indeed, there is obviously a case to be made on those grounds. The other is the general question of equity in relation to groups of policyholders of different companies at a time of developing Government thought and ultimately of commitment in this field.
I believe that the delay of the Government in the announcement that they were going to introduce this legislation, coupled with the inadequacy of powers of supervision—which, as the Undersecretary pointed out, must have been within the limits which applied, but which nevertheless led many people to believe that the Department of Trade had a responsibility for ensuring the viability of insurance companies which issued such policies—amounts to what can only be regarded as a capricious exercise of responsibility, implicit if not actual, by the Government. Therefore, a more even distribution of responsibility for the failure of insurance companies is preferable to allowing a group of Nation Life shareholders to suffer their plight unrelieved.

Mr. William Small: I intervene in this debate purely on the basis of my observation of the events under discussion, although I have received some letters from Nation Life subscribers following an article which appeared in the Daily Express.
The picture presented to us of the mode of persuasion to induce me or other people to subscribe their money is a picture of a man with a bowler hat, an umbrella, a bundle of important papers, and a prospectus. Historically, the principle of insurance companies is based more or less on the life of the individual, and therefore the criterion is the doctrine of chance. There is no other doctrine. It is not an exact science. What an insurance company does with my money I can never know. I do not know where the money is invested.
I am sorry for the Nation Life subscribers who have been affected. According to my reading of the matter, 26 different kinds of policies were involved. Why do not the insurance companies operate a scheme on the lines of the Motor Insurers Bureau, to which, in hit-and-run cases, where a person has been left to die in the road, an appeal is made? Sometimes one is successful, and sometimes not. That is the nearest analogy that I can think of. If such a system were operated the insurance industry would be self-supporting.
I shall be obliged to the Minister if he will say whether in matters of this kind the taxpayer is involved in the legal costs.

6.45 p.m.

Dr. Glyn: I am grateful to my hon. Friend the Member for Croydon, North-West (Mr. Taylor) for moving this amendment. I am sure the whole country would like to see this particularly nasty bit of dealing widely debated in the House. Irrespective of what one may think about the Bill, I do not think there is any hon. Member who has not received many letters on the subject. It is true that hard cases make bad law, but this case is a very small one. I hope that I can show that the costs of putting the matter right—if I am wrong, the Minister will, no doubt, correct me—need not be borne by the taxpayer.
There is no doubt that a certain amount of enthusiasm was whipped up by the Press and that hon. Members received letters as a result of articles such as those which appeared in the Sunday Express. My hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) has copious notes, among which I am interested to see he has a copy of the Sunday Express. I do not think it is a bad thing that hon. Members received letters. There is no doubt also, from the letters which I received, that many of the policyholders, in whichever of the 40 categories they were, had some idea that the Department of Trade was watching over their interests—that there was a certain measure of watchfulness on the part of the Government.
I am prepared to admit that it is up to the policyholders to decide whether they wish to take a risk. Nevertheless, a lot of enthusiasm has been worked up in the country and in the House. I was surprised to learn that my hon. Friend the Member for Croydon, North-West attracted 212 Members as signatories to his motion. I only hope that some of the Members who signed the motion will follow us into the Lobby.
We are dealing with small savers. We are not dealing with large capitalist speculators. We are concerned with the small man who invests his money. It might be of interest for the House to know the average holdings. Various figures have been mentioned in the national newspapers.
The next important matter is retrospective action. I am sure that my hon. Friend the Member for Worthing (Mr. Higgins) will refer to it. The degree of

retrospection in this case is very small. Indeed, the comparison which was made by my hon. Friend the Member for Croydon, North-West was particularly apt.
The next matter we have to consider is the question of costs. There is no reason why the Government, because of the length of time it will take to wind up a company, should not say "We know there are assets. We shall advance you a loan, pay the shareholders and collect the amount of money "which is undoubtedly due in the form of fixed assets or investments, all of which take a considerable time to liquidate.
Rather aptly, before this debate the liquidator announced that policyholders would receive 41½ per cent. For once the sense of timing, perhaps prompted by the Treasury, was extremely good.

Mr. Clinton Davis: The liquidator acted completely independently on this matter. We put no pressure on him to make a payment on this day of all days.

Dr. Glyn: The hon. Gentleman knows that the Leader of the House can say when the debate will take place. It may not have been in his mind, and it is possible that at the time the Government were unaware that this subject would be raised.
Why cannot the Government help in the way I have suggested when we have a problem of this nature, which is comparatively small, and when the case is similar to that of Court Line, in which the people understood that there was some form of guarantee? I shall not be more controversial. In the case of Court Line the public had no assurance, but they would have had it with an insurance company, such as Nation Life. If we had to pay the whole cost, what would it be?
Secondly, if both the liquidator and the Government got together and said that they had estimated what was left in the kitty, could the Government not make a down payment, which the liquidator could then distribute to the unfortunate people and, at a later date, recover the sum through the normal process of liquidation?
The point made by my hon. Friend the Member for Croydon, North-West is important. Old people, who have small savings and who may not live very long, are involved. Today, when we are dealing with this comprehensive Bill, it is


right that we should include Nation Life. I hope that the House will take a compassionate, if retrospective, view in this case and vote for this amendment.

Mr. McCrindle: I declare an interest, as one attached to an insurance company. Like my hon. Friend the Member for Croydon, North-West (Mr. Taylor), I have been fairly active in the matter of Nation Life ever since the unfortunate events that attended that company some time ago. However, unlike my hon. Friend, I have not seen fit to sign the Early-Day Motion to which he referred and which he said has now been signed by a substantial number of our colleagues. I have refrained from being a signatory, partly because of my experience of the insurance industry but, in particular, because I hoped that some sort of rescue operation would emerge from among the insurance companies and, secondly, because I was confident from all that I knew that the amount which would eventually be paid by the liquidator would be comparatively high. That was my view some months ago.
In the light of that, and because I am genuinely fearful of retrospective legislation—not so much in this regard but because it could be used as a precedent for the future—I decided that it would be unwise to sign the Early-Day Motion. However, because I recognised the hardship from which many of these Nation Life policyholders were suffering, I tried to put forward a compromise solution.
I directed a Question to the Secretary of Stae for Trade to the effect that the Government and the insurance companies combined should, outside this Bill, advance an amount equal to the difference betwen what the liquidator would finally pay and about 85 per cent. of the initial investment.
I pay tribute to the British insurance industry for the part of the rescue of Nation Life policyholders that it was able to mount, which has gone completely unnoticed both inside and outside the House. It would be no more than fair to say that the British insurance industry has been pilloried on many occasions over the past few years, but seldom less fairly than in regard to Nation Life.
I turn to the situation of those policy-holders who had annual premium payment policies. The British Insurance Association and the Life Offices Association together have been able to rearrange and redistribute the cover in a way that merits tribute from this House. That part of the Nation Life problem on which they have not felt able to assist relates entirely, as I understand it, to the single premium policies, the income bonds and the like, which many of us believe, no doubt with the benefit of hindsight, that Nation Life was extremely ill-advised to introduce in the first instance.
I confess that I was disappointed that the insurance industry and the Government were not able to meet my suggestion of a payment of an amount between the total eventually paid by the liquidator, and, as I suggested at that time, 85 per cent. of the initial investment. Nevertheless when I heard that this was not likely to be the case, my feelings were not so strong that I felt it was still possible to sign the Early-Day Motion, and certainly my fears about retrospective legislation could not be overcome.
In the light of this lengthy saga, with its extensive trail of hardship revealed to hon. Members daily, I have been forced to think seriously again. The hardship of which I speak is difficult for those concerned to understand. I endorse the view of other hon. Members that those concerned are mainly elderly people. Therefore, to be told that 41½ P is being paid and that, with a bit of luck, in three or four years' time up to about 65 per cent. will be paid, is really chilly comfort for those who, because they were elderly, placed a large part of their life savings with this company.
Those concerned cannot understand why, if the Court Line rescue could be brought about with an element of retrospection when it relates only—I say "only" advisedly—to holidaymakers who lost out, it is impossible to engage in a degree of retrospection in cases where life savings are sometimes concerned. They cannot understand why the Welfare Insurance Company Limited, the London Indemnity and General Insurance Company Limited and others which have been the subject of failure have somehow been bailed out. Esoteric arguments which


emanate from this place about retrospective legislation fail to cut any ice. In short, the people concerned are saying "Why us? Why should not we be given some advantage and some protection by the Government and the industry combined?"
7.0 p.m.
There can be no doubt that the people of whom we are speaking are not by any stretch of the imagination professional investors. The average amount invested by a Nation Life income bondholder was £900. By no stretch of the imagination is that the sort of amount one invests if one wishes to engage in tax mitigation through the use of life insurance policies. Nothing has angered me more or caused me more earnestly to reconsider my own position than the words uttered the other day by the hon. Member for Bethnal Green and Bow (Mr. Mikardo), to which reference was made by my hon. Friend the Member for Hitchin (Mr. Stewart).
These are people who are in need of our support. They are certainly in need of our understanding. The Court Line people and the Welfare and London Indemnity people having been rescued, no argument has been put forward so far to show why we should cast 32,000 people—that is the number of policy-holders concerned—into a situation in which they are completely exposed for all time. They may have been foolish in their choice of this company, but on the face of it they were perfectly safe to make that choice. Perhaps they should have taken better advice. Perhaps on more occasions they should have gone to a reputable insurance adviser. I am forced to remind myself, however, that a great many of them did just that.

Mr. Edward Gardiner: Does my hon. Friend agree that some of the people who have been most reprehensible in their conduct in this affair have been the brokers who persuaded their clients to accept these policies in order that they should get larger commissions on the policies?

Mr. McCrindle: I find it difficult to challenge that, except perhaps to say that had not Nation Life, in its lack of wisdom, been prepared to offer not only ever better terms to the prospective policyholders but ever better terms to the insurance brokers as well, the whole

unfortunate saga would never have seen the light of day, so I am agreeing with that argument.

Mr. Stainton: Does my hon. Friend intend to enlarge and explain that point in terms of the emphasis on the word "guarantee"?

Mr. McCrindle: Yes. Again, many people were quite prepared to read things into the word "guarantee" because they were unsophisticated people, unused to the ways of investment and the highways and byways of high finance. They took the word "guarantee" as meaning what? I think, in retrospect, that they were entitled to take it at its meaning. To that extent they were not knaves. They may have been foolish. But purely as a result of that we should not decide that there is nothing that we are able to do in the House tonight to assist them.
However, I am again conscious of the feeling of the House that retrospective legislation is a dangerous path. Therefore, in a spirit of constructive helpfulness I want to put a compromise solution to the Minister. I hope that this time he will genuinely listen and be persuaded that it is a possible way out of the difficulty. I want to ask the Minister again why, if this measure is seen as the wrong vehicle, we should not introduce another similar vehicle, either in conjunction with a contribution from the insurance industry or partly as a further levy on policy-holders, or partly as a Government grant in some other way. I ask why there should not be introduced a Nation Life Policyholders Indemnification Bill. If, indeed, it is a question of the difficulty of incorporating this matter into this Bill, I suspect that my hon. Friend the Member for Croydon, North-West would not dissent if an equally acceptable way could be found of helping these people.
It is one thing to decide on the title for the Bill but another thing to decide how these people are to be assisted. I remind the House of what I said a few moments ago. My previous suggestion was that these people should be paid the difference between 41½ p and what the liquidator eventually would pay. I then suggested 85 per cent. It is now clear that the amount which the liquidator can obtain in anything but the long-term future will be less than 85p. In many quarters people are suggesting that they


will be lucky if it is 65p. I want to take a figure between those two and to suggest that the Government consider an advance to the liquidator for immediate payment to Nation Life policyholders of the difference between 41½p and 75p. If the total amount eventually recovered turns out to be 75p, the Government would indeed have loaned the money and will ultimately have lost nothing for the taxpayers.
If I am asked "Why, now, 75p?" and why I am scaling it down, I reply that I am looking for an avenue through which to escape the difficulty of retrospective legislation and through which I hope I can pull the Minister in a spirit of compromise. The difference between 75p and l00p—25p—is a large amount in any circumstances and should be the amount that the Nation Life policyholders would expect to pay for having been pulled into the reality of a situation that they did not realise they were entering.

Mr. Clinton Davis: Does the hon. Gentleman additionally propose another compromise—to use his term—that would bring in the victims of the failures of Vehicle and General and some other companies, who are still awaiting their money?

Mr. McCrindle: I do not think that the Minister has been listening half as well as I hoped he would listen. I quite deliberately said that the reason why I think that Nation Life is a separate case is that the most recent failures where similar policies and contracts have been involved included the Welfare Insurance Company and the London Indemnity. One needs to go back only that far to understand why the people with Nation Life, realising that those companies failed at approximately the same time but that they have been bailed out, do not understand why Nation Life policyholders should not be helped.
I do not suggest we turn back the clock as far as the Minister suggests. I suggest that the real comparison is between Nation Life on the one hand, and the London Indemnity and Welfare companies, on the other hand. I ask the Minister to contemplate that before he replies.
I have taken long enough of the time of the House, but I want to make it quite clear that it is because I feel that a compromise must be reached to assist 32,000

policyholders who have been suffering through the uncertainty of the situation for a long time, who have clearly made manifest their extreme distress in letters to hon. Members on both sides of the House, that I heartily commend the compromise I propose to the Minister.

Mr. Maxwell-Hyslop: I have listened with great attention to my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) because of his profound knowledge and experience of the insurance industry. I am afraid, however, that he cannot escape from the reality from which he has told us he wants to escape, because this is the moment of decision. He must know as well as everyone else in the House that the Minister has no power to come to the Dispatch Box and say "Yes, I shall do what the hon. Member asks." It would take a decision of Cabinet to authorise the legislation for which my hon. Friend asks. If anyone follows him into his attempt to escape from the dilemma, what they will escape from is the last moment when they can take a decision, which is this moment. Once this moment has passed, my hon. Friend will be in pawn to the Minister knowing perfectly well that the Minister's considerations will end with a tear of sympathy and nothing more.
I should be the last to say either that other businesses in general have an obligation to rescue customers of an imprudent business or that the taxpayer has an obligation to come to the rescue of imprudent investors. Why should we distinguish this case? I will not repeat the reasons which have already been given, but some reasons have not been given.
After the collapse of Vehicle and General there was an inquiry, from which it transpired that there was a considerable element of slackness within the Department charged with enforcing the regulations designed to protect the public from incompetent, or worse, insurance companies. Various excuses about shortages of staff were given. As a result, the public, and indeed Parliament, assumed that the shortcomings revealed by the inquiry had been rectified and that there is a difference between the caveat emptor attached to going to a car dealer under a railway arch and buying an astonishingly cheap car and asking a senior official of the Bank of Scotland what the bank


recommends as an insurance company and, when the reply is "Nation Life", investing therein. There is the world of difference between trying to get an improbable bargain under railway arches and investing in what purports to be a guaranteed bond after the Government of the day have announced that they have remedied the shortcomings in the Department.
What distinguishes the two cases is the legislation which has been passed to date to protect people and which has given people the impression that when they contract a certain type of business with an insurance company they are not speculating but are contracting to receive warranted returns in a way which they would not expect if they were going in for the highest returns they could find in the speculative market.
I do not like retrospection as a general principle. It is most reprehensible when it relates to criminal law. There is then a unanimity of opinion that it should not be used when events are termed criminal which were not criminal when they happened. We are not talking here about such a matter.
The Court Line case has been mentioned as a precedent. I do not want this to be a precedent for people in future to imagine that they need not exercise due prudence. However, if this series of amendments were to be passed, the penalty upon the unfortunate people who entrusted their life savings to Nation Life would still be a desperate and heavy one. They have been without income for some time. Inflation has rushed on. They will lose approximately one-quarter of their total capital, anyway. I should have thought that that was quite enough suffering to discourage people from being light-hearted in their approach to insurance companies in future.
I do not claim that this is an ideal solution. I do not believe that there is an ideal solution. I regard this as the best alternative that is available to us. Tonight, in the debate on this amendment, we must either grasp this alternative or allow it to pass for all time. I do not think that we should be right to allow it to pass. That is why I feel obliged to give the matter my support in the Lobby.

7.15 p.m.

Mr. Higgins: My hon. Friend the Member for Croydon, North-West (Mr.

Taylor) moved the amendment compassionately. We are all well aware of the seriousness of the points he raised.
Like many other hon. Members, I have received a considerable mail from comstituents about the problems arising from the failure of Nation Life. In my constituency there are probably more elderly people who invested in Nation Life policies than there are in other constituencies. I do not think that any hon. Member will treat this as a light matter. It is a human problem and one which the House is right to view sympathetically.
The question is whether it is right none the less to show our sympathy in the way my hon. Friend suggested by accepting the amendment. There are powerful arguments against supporting the amendment. It has received a great deal of Press coverage. As my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) said, a number of those who purchased policies in Nation Life did so on the advice of their bank, their solicitor, or their insurance broker, or perhaps on the advice of all three and other expert advice. Many of our constituents invested on the basis of advice they received and which they had reason to believe was sound. Some of those investing in those policies were not in the category I have described, though they would benefit from the amendment.
The crucial point is that of retrospection. It is true that the selected date is the date of the Government's announcement of their proposals, but that is not an unusual form. As I understand the position, it would be exactly the same if the operative date of the Bill were the date of Royal Assent. There is no difference as to the practical effect. My hon. Friend argued particularly on the point of retrospection that the Bill should be made retrospective because the fact that the Government had created uncertainty at the time that his Early-Day Motion was tabled meant that the industry did not intervene. Despite the Bill and despite the fact that Nation Life is not included, the industry has given considerable support to a number of policyholders of Nation Life and there is no reason to suppose that that support would have been any different if the situation my hon. Friend described had not existed when the matter first came to public notice.
I believe that the House is right always to regard with considerable reserve any proposal to introduce retrospective legislation. A number of my hon. Friends feel strongly about this.
The next point arises particularly from the speech of the hon. Member for Glasgow, Garscadden (Mr. Small). There is no question of taxpayers' money being involved. There is a levy on other policyholders. Not only are we being asked to act retrospectively as regards other policyholders in Nation Life. It is also proposed by the amendment to take retrospective action which would impose a charge on other policyholders many of whom—perhaps most of whom—have taken out policies on far less favourable terms than those which were taken out by holders of Nation Life policies. The retrospection therefore cuts both ways—on the levy as well as on the benefits which would accrue if the amendment were to be accepted.
Hon. Members would do well to recall the precise circumstances with regard to Court Line. This is a very convoluted story. The Government took the view that the Court Line proposals should be retrospective and they believe that these proposals should not be retrospective. In my view, neither should be retrospective. The Court Line proposals were made retrospective because the Government felt that these holidaymakers should be covered because they, the House and the country were misled by statements made by the present Secretary of State for Energy. That is why the House decided that retrospection was the answer at that time. We only assented to that procedure while expressing our view that the right action was for the Government to accept responsibility, to pay the required amount out of taxpayers' money, not to introduce retrospective legislation, and for the Secretary of State to resign. The situation was confused by some trouble about the Ombudsman and the Secretary of State did not resign. To this day, I find it incomprehensible that he has not resigned. The circumstances surrounding the Court Line affair were very different from those surrounding Nation Life.

Mr. Stainton: The Court Line undertakings were given in the run-up to a General Election and there was some electoral

mileage in them. There is no electoral mileage for either side in the current situation from the 32,000 policy-holders in Nation Life.

Mr. Higgins: My hon. Friend's first point reinforces what I have been saying and his second point is also true. We must seek to reach the right decision in this matter and that is why it is right to spell out the complex arguments involved. The Court Line analogy does not stand up.
The Early-Day Motion which a number of my hon. Friends supported was put down in January and there have been a number of significant changes since then. It does not follow that any hon. Friends who signed the motion should therefore automatically support the amendment.
A high percentage of the letters that I have received have been from people who claim to have lost all their money. It is important to convey to constituents that the liquidator has been proceeding with his work—and I have been urging the Government to see that he proceeds with all possible haste—and an interim distribution of 41½ pence in the pound is expected to be paid today. The liquidator is also making every effort to arrange for further dividends. That is the first change in the situation.
In addition, under a scheme announced on 25th May, the insurance industry itself has offered ordinary policyholders, without any evidence of health, a guaranteed 90 per cent. of the sum secured by premiums paid before liquidation. Ordinary policyholders in Nation Life have been helped effectively by this scheme. In the case of claims arising since the date of liquidation, the life offices have offered 90 per cent. of the admissible death claim, even if the claim in liquidation would only have been limited to the surrender value.
In the case of regular premium unit-linked policyholders, a number of unit-linked offices offered replacement policies, again without evidence of health, with a rebate of 50 per cent. of the first year's premium. The policyholders will continue to hold their claim against Nation Life. This is another change in the situation since the Early-Day Motion was tabled. We are really concerned with those people who have had exceptional kinds of policies.
If there are so-called excessive benefits, the amount which a policyholder would receive under the Bill, if the amendment was made retrospective, is not 90 per cent., but an amount scaled down in respect of excessive benefits. It is those policies which have excessive benefits that have not yet been covered. It is important to put over these facts.
One of the aspects of this problem which I find distasteful is the revelation of the cost of liquidation, which will reduce the amount available to policy-holders who have suffered as a result of the company's collapse. I understand the legal fees to date amount to £500,000 and the liquidator's expenses £700,000. No doubt the Under-Secretary will confirm or correct these figures. The Department of Trade's audit fee, which was originally expected to be £282,000, has been increased to £350,000 under an order recently passed by the House. Given the general feeling about the Department's actions in this case, it is curious that it should now levy an additional amount by way of audit fee. This is one of the matters causing us concern. Fees charged on a pro-rata basis might be appropriate for medium-sized companies, but they are inappropriate for small companies and amount to very large sums indeed where the assets of the company concerned are extremely large. This is a problem we should look at again. I do not wish to rest too heavily on the technical problems, because this is an emotional issue as well as a technical one. However, the difficulties in unscrambling the situation if one accepted the amendment would be very great indeed. It may be that some policyholders would be worse off. It would take a long time to try to unscramble this situation.

Dr. Glyn: Am I correct in saying that if the Government waived the audit fee, this money could be distributed among policyholders?

Mr. Higgins: That is the position if a report in yesterday's Daily Express is correct. In the past, the Department has given this service free of charge, but it is now charging a percentage of the money invested. If it has been a free service in the past, it is certainly a matter for consideration as to whether it should be so in the future.
All the ordinary policyholders in Nation Life and some other categories have been covered. Even if the amendment was accepted, the so-called excessive benefits would be very considerably reduced.
The House should not, however, lightly brush aside the main point, which is that retrospective legislation is being made which will impose a levy on other policy-holders in other companies. Many of them may well have taken out policies on less favourable terms than those by which they would be compensated under the amendment. On balance, while recognising the very human problems involved here, I think that it would wrong to support my hon. Friend's amendment.

7.30 p.m.

Mr. Clinton Davis: I am no more immune than are other hon. Members from recognising, by the amount of correspondence I have received from constituents, that a great deal of anxiety and hardship has been occasioned by the collapse of Nation Life. It would be easy for me simply to say, as did the hon. Member for Worthing (Mr. Higgins), "Let the policyholders of these other companies bear the burden". I do not think that that would be fair, in the circumstances. I do not think, either, that it is a burden which, in all the circumstances should fall on the taxpayer at large. I understand the motives which caused a large number of hon. Members to sign the Early-Day Motion. I have no doubt that they were all under considerable pressure from people who suffered as a result of the collapse.
A number of misconceptions were entertained by people who had sustained these anxieties and hardships, and a number of them, in the earlier days, were certainly saying that they had lost all. The hon. Member for Worthing put the situation in true perspective. They have not lost all, and only today has come the announcement of the substantial payment by the liquidator which indicates the amount to be 41·5p in the pound on assessed claims. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) thinks that there is something sinister in this. I have said that there is not. Of course, we wanted the liquidator to make payment at the earliest possible opportunity, but neither I nor the Secretary of State


told the liquidator to conform to the Government's wishes on this. That would be improper. If the hon. Member reflected on the matter he would see that we have not been guilty of that sort of turpitude.
The hon. Member for Croydon, Northwest (Mr. Taylor) made a measured and short speech. I apologise to him now, as I was unable to on the last occasion, for not having given way to him several months ago, but I had only about a minute in which to speak and I had no time to give way. I still think that he was standing on his head. The Government never gave any undertakings about rescueing Nation Life. There is not a scintilla of truth in that allegation. Simply to pray in aid a speech by one of my hon. Friends in the debate is not good enough, and my hon. Friend would be the first to agree that nothing was said by any Minister or official in my Department to justify that assertion.
The hon. Member for Worthing covered many points that I would have covered, and I agree with him in virtually everything he said, with the exception of what he said about holidaymakers. This subject was debated at significant length just before the Summer Recess. The hon. Member uttered a number of strictures about the rectitude of providing retrospective legislation, but he did not vote then against the Government on the principle.
If I speak at greater length than I would normally, it is because a number of important points have been made, and the House and the country are entitled to know where the Government stand. It gives me an opportunity, tonight, to refute some of the bogus claims which have been made, not by hon. Members but by one particular newspaper—the Daily Express.
My right hon. Friend announced his intention to establish the protection scheme on 29th October 1974. Before that date, policyholders had no reason to expect protection from a statutory scheme if their company went into liquidation. No insurance companies had any reason to expect that they would be levied to provide that sort of protection. It would therefore be wholly unreasonable to expect insurers to pay out for policies in respect of companies that failed before it

was known that the statutory scheme was to be introduced.
Even if the principle of retrospection were to be accepted—and I do not accept it in this context—I would not agree with the contention of the hon. Member for Brentwood and Ongar (Mr. McCrindle), who has adopted a very objective view in the debates both in the House and in Committee, that one could simply justify not going back much further than the National Life situation. He asked about the Welfare and the London Indemnity situation. It was in these circumstances that the industry thought it appropriate, for a whole variety of circumstances then prevailing—circumstances which did not prevail in the Nation Life situation—to mount a rescue operation. The Government were not called upon to do so. Allegations were made about the appropriateness of the procedures which were adopted by the previous Government and the Department of Trade and Industry at the time, and about the degree of vigilance it showed on Vehicle and General, and Fire, Auto and Marine. However, the previous Government rightly thought it inappropriate to accept those allegations and step in and offer compensation to people who in many instances were desperately affected by the collapse of those companies, and who have still received no compensation, or not the full compensation to which they were entitled.
Where does one stop when one introduces this degree of retrospection to ensure an equitable solution to the problem? The date which has been chosen, therefore, is arbitrary, and retrospection is bound to be arbitrary, too. I have referred to the payment made by the liquidator today, and no doubt when further assets are realised the liquidator will find it appropriate to make further payments. That is a matter for him. Of course, one will want to see that happen if it is possible.
I want to say something about the holidaymaker situation. I do not believe that the circumstances of the failures of 1974 are in the least comparable, because there was a scheme operated by the Civil Aviation Authority and the industry, designed to provide protection against failures. The public had a reasonable expectation that they were adequately covered against loss. In the event the system did not prove adequate to meet


the calls made upon it. Therefore, the Government considered it right, in view of the exceptional circumstances of that year, to provide for compensation not simply to the Court Line victims but to the others.
There is an amalgam of reasons for the failure of Nation Life, and I shall refer to the basic ones. There was clearly a fall in the value of assets. The company had largely involved itself in property development, and there had been a collapse of the property market. There was an inadequate matching of assets to meet liabilities at a time when a run of surrenders might have taken place. There was the inability of the parent company to provide fresh capital, and with no sign of a rescue forthcoming the company announced the invocation of the clause in its property bonds allowing payments on surrender to be deferred by six months. That was in anticipation of a rush of surrenders on the announcement of a major reduction in unit values. The company ceased writing new business and eventually applied to the court, on 2nd July 1974, to petition for its winding up.
The hon. Member for Sudbury and Woodbridge (Mr. Stainton) said that the difference between the holidaymaker and Nation Life situation was that the Government could derive some electoral benefit from one and not from the other. I point out that the date of the Nation Life petition was 2nd July 1974. That is a relevant date.
Many allegations have been made, without evidence, that the Department failed to act diligently and in good time. But the Department placed on the company its standard requirements under Section 12(5) and Section 12(6) of the 1973 Act, including a requirement to place its assets in trust. In addition, strengthening requirements were placed on the company as the situation developed. The Department attempted to isolate the funds and assets from the parent group, but this did not stop certain of the company's assets being devalued in the conditions prevailing.
Attempts by the Department to find a rescuer were unsuccessful. Many attempts were made. The hon. Member for Windsor and Maidenhead (Dr. Glyn) asked me to say something about the 32,000 policy-holders. There are 3,000 ordinary life and endowment policyholders with claims

averaging about £300; 8,000 single-premium property bondholders, with claims averaging about £600; 11,500 regular premium property bondholders, with claims averaging about £70; and 8,000 guaranteed-income bondholders, with claims averaging about £2,400.
It is very unsafe to talk just of averages, because there are the very ordinary, elderly, humble people, who may have a certain amount of money which they were advised to place in a certain way, and others who do not fall into that category. It is tempting to think that all the people involved were humble and poor, and perhaps ill-advised, but it did not happen quite in that way, though a high proportion of the policyholders are elderly and have small investments. That is a factor that hon. Members were right to dwell upon.
7.45 p.m.
The action that we took before liquidation has been much criticised, as have the liquidator's fees. I hope that what I have said about the action before the liquidation will give an indication of the care and diligence of my officials in this matter. I am sure that the whole House will think it appropriate that those officials should not be constantly pilloried in the difficult and complex task that they have to carry out. Based on my knowledge in the past 18 months as a Minister in the Department, I have nothing but praise for the work of those civil servants. I am sure that those who preceded me in my office also regard the work that they have done as very skilful.
I have been asked about the liquidator's costs and the Department's fees. It is true that the estimates of the legal costs are £500,000, and that the liquidator's and special manager's remuneration is estimated to be £700,000, and that the Department's fees are estimated to be £282,000. [Interruption.] The matter should be seen in its true context. It is easy to get it out of perspective.
A special manager's remuneration falls to be fixed by the court, which takes into account the circumstances of the particular case. They include the time that must be spent by the special manager, and the basis of his professional fees. The manager charges his professional time, as one would expect. He will not


do it for nothing. He is a professional adviser.
The special manager was appointed by the court on 25th July 1974, and was appointed liquidator in September 1974. Unless the court otherwise orders, a liquidator's remuneration is fixed by the committee of inspection appointed by the court to act with the liquidator. It must be calculated partly on realisations and partly on the amount distributed in dividend. There is nothing unusual about the fees reserved for the liquidator in this instance as against those in other liquidations. It is a very big and complex liquidation. I cannot foresee what amount the committee of inspection may fix for the liquidator's remuneration, but if the Department is of the opinion that the remuneration fixed by the committee is unnecessarily large it may apply to the court, which can fix the amount.
I turn to the legal costs. I declare my interest only as one who was a practitioner in a firm of solicitors, but with no interest in this case. The legal costs are reserved under the terms of the court order, which has been fixed at the sum of £500,000 in this case. The actual fees will be taxed following the purposes for which those fees are reserved.
We know that there has already been immensely complex litigation over this matter. Perhaps it has not been as lengthy as we feared at one time. The court has to fix a fee in regard to costs which will take into account not only current litigation but future litigation as well, but at the end of the day the court is able to tax the professional fees of the solicitors and counsel involved, and in that way the public interest is maintained. It is not just a reckless amount dreamed up by somebody, as was implied in some of the comments today.
The Department of Trade fixed fees not simply for Nation Life in isolation. These fees are fixed under the Department of Trade Fees Order, and they go towards the cost of the insolvency service, which is a vital one. These include the costs of the Official Receiver and of the Department in dealing with a variety of matters entailed in the liquidation. This is vital work, undertaken for the protection of creditors at large. It is very important to take account of that factor.
I was disappointed that the hon. Member for Worthing should have, in a sense, joined with those who have been deeply critical of the amount charged by the Department. The insolvency service must be conducted for the benefit of the country as a whole, because it must represent the interests of the creditors, but we do not have a discretion to waive or reduce fees if there is hardship. We have no discretion in that matter at all. There is hardship in every litigation.

Mr. Higgins: The hon. Gentleman quoted a figure of £280,000 a few moments ago. The Press reports say that the amount is to be increased to £355,000. Is that true or not? If it is true, it was very deceptive to give a figure of £280,000. It is also asserted in Press reports that the Department is to levy a new cash management charge, which has previously been a service rendered free. Is that true?

Mr. Davis: I do not know the exact amount and cannot specify that. The figure I had was £282,000. I think that that includes the new provision, but I may be wrong about that. While I am making my speech there will be an opportunity for correct information to be provided if my figure is wrong. If hon. Gentlemen want to intervene, I am prepared to give way, within reason. Now that I notice the hon. Member for Chingford (Mr. Tebbit) wishing to intervene, I am not sure that I should have made that suggestion. I fear that he will raise a point about Spain.

Mr. Norman Tebbit: I was merely seeking to help the hon. Gentleman by giving him a few moments seated while his advisers, on whom he has heaped so much praise, could do this £280,000 worth of work and get the right figures to the Box, so that he would not have such trouble in deciding whether he is giving us good or bad figures.

Mr. Davis: I am grateful to the hon. Member for Chingford. It is perfectly true that a new order has been made. It does not relate, however, to Nation Life itself. This is a matter which is before Parliament. Parliament has the opportunity to take a view about these matters.
The insolvency service, like other Government services, ought not to be subsidised by the taxpayer at large. It ought


to be self-sufficient. It is for this reason that these additional provisions have had to be made. I understand that this will involve an additional liability in regard to Nation Life. That is difficult to predict at this moment.
I was wrong in giving the figure of £282,000. That was the figure up to 1st October. It will probably be in the region of £350,000.

Mr. Higgins: Is it not really deceptive for the hon. Gentleman's officials to have provided him initially with a figure of £282,000, which hon. Members will have taken to be the actual figure? He now says that the figure is in the region of £350,000. He is not sure of the exact figure. It is not good enough for him to give the House out-of-date figures. May we please have an answer with regard to the extra new charge to which I have referred?

Mr. Davis: The figure I have just given is only an estimate. Clearly, it was my fault and not that of my officials when I referred to the first pre-October figures. The situation has been altered by the fact that the new order will take effect. Without being absolutely precise, I can say that the figure is about £350,000.

Mr. Robert Taylor: Will the Undersecretary confirm, then, that the new scale of fees is retroactive and is to go back to the commencement of the liquidation of Nation Life, which was in July? What is the difference between approving this amendment, and making it retroactive for Nation Life, and the measures that the Under-Secretary is taking?

Mr. Davis: That is not my understanding of the position. I shall advise the hon. Gentleman, as far as we can estimate it, of the position in regard to Nation Life, but I cannot give an exact estimate at this time.
I should like to deal now with some of the allegations that have been made in the Press and repeated in the House tonight. The Daily Express printed two articles, and it seemed that a number of hon. Members have relied enormously on the information provided in those articles. I suggest that, in unravelling this piece of old rope from the Daily Express, it is right that we should have regard to the nature of the newspaper itself,

particularly in the context of the last few days.
Only the other day the Daily Express indulged in some highly misleading and irresponsible journalism which was the subject of a perfectly appropriate attack by my right hon. Friend the Home Secretary and by the Solicitor-General. The Daily Express has indulged in a misleading and highly irresponsible campaign, also, in relation to this issue. It has deliberately manipulated the truth and distorted the facts in a number of material particulars.
Let me deal with these allegations. Mr. Roberts, the City Editor, stated, in an article of 21st July, 1975, that my right hon. Friend the Secretary of State for Trade
has labelled Nation Life's victims as wealthy speculators".
We heard that repeated in the House tonight.
8.0 p.m.
I am entitled to rebut that allegation, because it is a serious allegation. It is totally without foundation. It was never said. My right hon. Friend said quite clearly during the Second Reading debate on 18th July, three days before the article was published:
…it is wrong to assume that, because a company proves to be unsound or because some of its policies…can be seen in retrospect as over-generous, its policy holders must be imprudent speculators rather than ordinary savers. Indeed, a noticeable feature in these cases is the considerable number of old people affected—motivated not by greed but by the impact of inflation".—[Official Report, 18th July 1975; Vol. 895, c. 1953.]
In a more recent article on 27th October, Mr. Roberts retracted his ground. He wrote that a letter from the Secretary of State caused my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) to write to a policyholder:
…the greater part of the money in Nation Life did not come from people like yourself but from what might be called professional investors looking for relief from tax liability.
There is not a word of truth in that, either.

Mr. Robert Taylor: On a point of order. I have a copy of that letter in my possession.

Mr. Davis: It was not in fact a statement that my right hon. Friend


the Secretary of State made. There was not a tittle of truth in that allegation.

Mr. Robert Taylor: rose—

Mr. Deputy Speaker (Mr. George Thomas): Order. The hon. Member for Croydon, North-West (Mr. Taylor) will understand that it is not a point of order for me if he disagrees with the contents of or challenges what the Minister says. He moved the amendment. He will have an opportunity to make his point in a moment.

Mr. Michael McNair-Wilson: Perhaps my hon. Friend the Member for Croydon, North-West (Mr. Taylor) might be allowed to read the letter so that we could understand its contents.

Mr. Deputy Speaker: Not in the middle of the Minister's speech.

Mr. Davis: I am saying that my right hon. Friend the Secretary of State did not write a letter saying:
…the greater part of the money in Nation Life did not come from people like yourself but from what might be called professional investors looking for relief from tax liability.
I have not seen the letter from which the hon. Member for Croydon, Northwest quoted, but I understand from my hon. Friend the Member for Bethnal Green and Bow that he has never suggested that my right hon. Friend wrote such a letter.

Mr. Robert Taylor: rose—

Mr. Davis: Yes. Perhaps this might be the moment for the hon. Member for Croydon, North-West to read the letter.

Mr. Robert Taylor: It is a letter from the hon. Member for Bethnal Green and Bow (Mr. Mikardo) to one of his constituents, Mrs. A. Hart, of 66A, Medway Road, London, E.3. It is dated 17th April 1975. Referring to his right hon. Friend the Secretary of State he wrote:
But I dare say that he will be taking into account the fact that the greater part of the money in Nation life did not come from people like yourself but from what might

Division No. 379.]
AYES
[8.08 p.m.


Aitken, Jonathan
Banks, Robert
Braine, Sir Bernard


Arnold, Tom
Bell, Ronald
Douglas-Hamilton, Lord James


Bain, Mrs Margaret
Bottomley, Peter
Dykes, Hugh

be called professional investors looking for relief from tax liability."

Those are the exact words quoted in the Daily Express, and they are the exact words that the Minister has read.

Mr. Davis: The words have been attributed to my right hon. Friend the Secretary of State, and I refute that he ever wrote such a letter. I deny the allegations of Mr. Roberts about the lack of action by the Department of Trade. I say that he has dwelt upon untruth after untruth and that it is particularly reprehensible when we are dealing with the anxieties of ordinary humble people. The hon. Member for Croydon, North-West should not seek to suggest that those words were ever used by my right hon. Friend the Secretary of State. They never were.

Mr. Robert Taylor: It may help the House if I read the entire paragraph of the letter from the hon. Member for Bethnal Green and Bow. He wrote:
The Secretary of State told me he is considering carefully whether to make the Bill retroactive, and in his consideration he is bearing very much in mind the position of people like yourself and some of his own constituents who put relatively small amounts of personal savings into Nation Life. But I dare say that he will also be taking into account the fact that the greater part of the money in Nation Life did not come from people like your self but from what might be called professional investors looking for relief from tax liability.

Mr. Davis: The hon. Gentleman has taken up the time of the House unnecessarily in making a totally bogus accusation against my right hon. Friend the Secretary of State, and what the Daily Express has done is to dwell upon one unthruth after another and to act as the wholesalers of the mendacious in this matter.
I believe that the policy adumbrated by the hon. Member for Croydon, North-West would not be in the interest of policyholders, and I ask the House to reject it.

Question put. That the amendment be made:—

The House divided: Ayes 48, Noes 117.

Fookes, Miss Janet
McAdden, Sir Stephen
Reid, George


Freud, Clement
Macfarlane, Neil
Rifkind, Malcolm


Gardner, Edward (S Fylde)
McNair-Wilson, M. (Newbury)
Ross, Stephen (Isle of Wight)


Grist, Ian
Mather, Carol
Shepherd, Colin


Hannam, John
Maxwell-Hyslop, Robin
Smith, Cyril (Rochdale)


Hawkins, Paul
Mayhew, Patrick
Spicer, Jim (W Dorset)


Hordern, Peter
Meyer, Sir Anthony
Thompson, George


Howells, Geraint (Cardigan)
Miller, Hal (Bromsgrove)
Warren, Kenneth


Hurd, Douglas
Molyneaux, James
Welsh, Andrew


Hutchison, Michael Clark
Morgan, Geraint
Young, Sir G. (Ealing, Acton)


James, David
Mudd, David



Jessel, Toby
Newton, Tony
TELLERS FOR THE AYES:


Knight, Mrs Jill
Page, Rt Hon R. Graham (Crosby)
Mr. Robert Taylor and


Knox, David
Penhaligon, David
Dr. Alan Glyn.


Lane, David






NOES


Archer, Peter
Gould, Bryan
Morris, Charles R. (Openshaw)


Ashley, Jack
Graham, Ted
Moyle, Roland


Atkinson, Norman
Grant, John (Islington C)
Newens, Stanley


Barnett, Guy (Greenwich)
Hamilton, W. W. (Central Fife)
Noble, Mike


Bates, Alf
Harper, Joseph
O'Malley, Rt Hon Brian


Bean, R. E.
Harrison, Walter (Wakefield)
Ovenden, John


Benn, Rt Hon Anthony Wedgwood
Hart, Rt Hon Judith
Park, George


Booth, Albert
Hatton, Frank
Parry, Robert


Bradley, Tom
Heffer, Eric S.
Radice, Giles


Canavan, Dennis
Hooley, Frank
Rees, Rt Hon Merlyn (Leeds S)


Cartwright, John
Horam, John
Robertson, John (Paisley)


Clemitson, Ivor
Howell, Denis (B'ham, Sm H)
Roderick, Caerwyn


Cocks, Michael (Bristol S)
Huckfield, Les
Rooker, J. W.


Coleman, Donald
Irving, Rt Hon S. (Dartford)
Roper, John


Cook, Robin F. (Edin C)
John, Brynmor
Sheldon, Robert (Ashton-u-Lyne)


Cox, Thomas (Tooting)
Jones, Barry (East Flint)
Short, Rt. Hon E. (Newcastle C)


Craigen, J. M. (Maryhill)
Kilroy-Silk, Robert
Short, Mrs Renée (Wolv NE)


Crawshaw, Richard
Lambie, David
Skinner, Dennis


Cryer, Bob
Lamborn, Harry
Small, William


Dalyell, Tam
Lamond, James
Smith, John (N Lanarkshire)


Davidson, Arthur
Latham, Arthur (Paddington)
Snape, Peter


Davies, Bryan (Enfield N)
Leadbitter, Ted
Spearing, Nigel


Davis, Clinton (Hackney C)
Lestor, Miss Joan (Eton &amp; Slough)
Stallard, A. W.


Deakins, Eric
Litterick, Tom
Stott, Roger


Dean, Joseph (Leeds West)
Lyon Alexander (York)
Taylor, Mrs Ann (Bolton W)


Delargy, Hugh
Lyons, Edward (Bradford W)
Tebbit, Norman


Dormand, J. D.
MacFarquhar, Roderick
Thomas, Ron (Bristol NW)


Douglas-Mann, Bruce
McGuire, Michael (Ince)
Wainwright, Richard (Colne V)


Duffy, A. E. P.
Mackintosh, John P.
Walker, Terry (Kingswood)


Eadie, Alex
Maclennan, Robert
White, Frank R. (Bury)


Ellis, Tom (Wrexham)
Madden, Max
Willey, Rt Hon Frederick


Ennals, David
Marks, Kenneth
Williams, Alan (Swansea W)


Evans, Ioan (Aberdare)
Marquand David
Williams, W. T. (Warrington)


Evans, John (Newton)
Maynard, Miss Joan
Wise, Mrs Audrey


Ewing, Harry (Stirling)
Meacher, Michael
Woodall, Alec


Faulds, Andrew
Mellish, Rt Hon Robert
Young, David (Bolton E)


Fernyhough, Rt Hon E.
Mendelson, John



Forrester, John
Millan, Bruce
TELLERS FOR THE NOES:


Freeson, Reginald
Miller, Dr M. S. (E Kilbride)
Mr. James Hamilton and


George, Bruce
Morris, Alfred (Wythenshawe)
Miss Margaret Jackson.


Gilbert, Dr John

Amendment accordingly negatived.

Clause 8

GENERAL POLICIES OTHER THAN COMPULSORY INSURANCE POLICIES

Mr. Moate: I beg to move Amendment No. 6, in page 6, line 23, leave out 'aviation and transport' and insert 'and aviation'.
The effect of the amendment would be to extend the right to compensation to a policyholder who was carrying out or who actually had transport insurance. I hasten to add that my intention is not to extend the policy in this way but primarily to obtain clarification of the meaning of the words.
As I understand it, at present the Bill is designed to offer compensation only to private policyholders. It excludes corporate bodies and reinsurance contracts. It also excludes
marine, aviation and transport insurance business.
It would be helpful to know what "transport" means. The phrase "marine, aviation and transport" has been used frequently during debates and has become almost popularised by the abbreviation "MAT". However, as merely a practitioner of insurance I do not know what is meant in the Bill by "transport". It may be some esoteric term or a category of return made by insurance companies


to the Department, but I do not think that it means what the general public understand it to mean. Clearly it does not mean private cars or commercial vehicles, because they are specifically included in the legislation. Presumably a private policyholder who has a commercial or passenger vehicle for transport purposes would be covered.
However, there is an anomalous situation. If a private person runs a lorry in his own name he could be compensated by the Bill, but if he puts his lorry in the name of a limited company—as many people do—he would not be so compensated. That is one of the anomalies of the Bill.
What is "transport" if it is not commercial vehicles? I presume that it could mean inland transit insurance, or insurance of goods in transit, but that is usually covered by the marine department and by the term "marine". Therefore, I should have thought that it would be covered by "marine, aviation".
I ask the Minister whether he can tell us the meaning of the word "transport".

The Under-Secretary of Stale for Trade (Mr. Eric Deakins): The hon. Gentleman said that he seeks clarification. Marine, aviation and transport are not three distinct business, but a single class. They are defined in Section 83(4) of the Insurance Companies Act 1974, which provides.
In this Act 'marine, aviation and transport insurance business' means, subject to subsection (9) below, the business of effecting and carrying out contracts of insurance".
There are a number of paragraphs. Paragraph (c) states:
upon the freight of, or any other interest in or relating to, vessels or aircraft…
(f) against transit risks (whether the transit is by sea, inland water, land or air, or partly one and partly another), including risks incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance".
In addition, "motor vehicle insurance business" is defined separately in Section 83(5) of the 1974 Act. That refers to what we normally mean by motor vehicle insurance—cars, and so on, on the road. I hope that explanation satisfies the hon. Gentleman.

Mr. Moate: I thank the Minister for his helpful explanation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn

Clause 12

DISPROPORTIONATE BENEFITS UNDER LONG TERM POLICH-S

Mr. Deakins: I beg to move Amendment No. 7, in page 9, line 30, at beginning insert:
'This subsection applies in any case.

Mr. Deputy Speaker: With this it will be convenient to take Government Amendments Nos. 8, 9, 10, 11 and 12.

Mr. Deakins: These amendments are all linked. Basically, Amendment No. 7 concerns Clause 12 which requires the Board to refer to an independent actuary any long-term policies of a company in liquidation which it considers may provide for excessive benefits. As the clause stands, the actuary's recommendations for any scaling down of excessive benefits are to be binding on the Board.
The effect of these amendments is to transfer from the independent actuary to the Board the ultimate responsibility for determining whether, and, if so, by how much, any excessive benefits are to be disregarded or reduced. An amendment with this purpose in mind was moved in Committee and had been asked for by the professional body—the Institute of Actuaries. My hon. Friend explained at the time that the drafting of the amendment was unsatisfactory but accepted the argument in principle behind it and promised to move appropriate amendments on Report. I hope that these amendments will meet with the approval of the House.

Mr. Tim Renton: When this Bill came forward many of us were surprised that Clause 12, as originally drafted, bound the Board to accept the actuary's recommendation. Not only was this surprising in itself, but it did not fit in with Clause 16(8) where, in the case of a company in financial difficulties, the Board asks the actuary to assess whether there have been been disproportionate benefits and is then free to take the actuary's advice if it so wishes.
Clause 12 has now been brought into line with Clause 16. I have no doubt that hon. Members on both sides who served on the Committee will feel that the clause now reads better and makes much better sense than it did originally.
It is clear that an actuary should be used in a case such as this to make a professional judgment whether the benefits are excessive, but such a judgment must, by definition, be subjective. An actuary has to form a view on the future rate of inflation, for example. In the case of a guaranteed income bond, excessive benefits one year may not be excessive in another year when the rate of inflation changes. It is appropriate that, when the actuary has made his report, the final decision should be left with the Board to decide whether it wishes to follow the actuary's advice in toto.
Earlier, my hon. Friend the Member for Faversham (Mr. Moate) referred to the Board being brought to life only by the kiss of the Secretary of State. If the Bill had been left as originally drafted and the Board had to follow the advice of the actuary without using its own general knowledge of the insurance business, then indeed it could have found itself to be a very weak instrument. That would have been a disservice to people in the insurance industry whom the Government would wish to ask to serve on the Board. We are pleased to support these Amendments.

Amendment agreed to.

Amendments made: No. 8, in page 9, leave out from beginning of line 40 to end of line 2 on page 10.

No. 9, in page 10, line 2, at end insert:
'(2A) In any case to which subsection (2) above applies the Board may determine in the light of any recommendation contained in the actuary's report that the liability or benefit to which that recommendation relates shall be treated as reduced or disregarded for the purposes of section 10 and 11 above; and where the Board so determine the liability or benefit in question shall be treated as reduced or (as the case may be) disregarded accordingly for the purposes of the application of section 10, of any provision of subsections (3) to (7) of section 11, or of any provision of any regulations made under subsection (10) of section 11 above (as the case may require) in relation to the policy in question. '

No. 10, in page 10, line 3, at beginning insert 'This subsection applies'

No. 11, in page 10, leave out lines 16 to 18.

No. 12, in page 10, line 18, at end insert:
' (3A) In any case to which subsection (3) above applies the Board may determine in the light of the value indicated in the actuary's report that the value attributed to the policy in question for the purposes of the claim in respect of the policy in the winding up shall be treated as reduced for the purpose of calculating the sum payable to the policyholder in accordance with subsection (9) of section 11 above; and where the Board so determine the value so attributed to the policy shall be treated as reduced for that purpose accordingly. '—[Mr. Deakins.]

Clause 13

GENERAL PROVISIONS WITH RESPECT TO THE PERFORMANCE BY THE BOARD OF THEIR DUTIES.

Amendment made: No. 13, in page 11, line 17, after 'section' insert '18 or'.—[Mr. Deakins.]

Clause 16

COMPANIES IN FINANCIAL DIFFICULTIES: TRANSFERS OF BUSINESS, ETC.

Amendments made: No. 19, in page 15, line 29, after 'to', insert:
'section (Special provision with respect to long term business of a company in financial difficulties) of this Act and to'.

No. 20, in page 15, line 37, after 'to' insert:
'section (Special provision with respect to long term business of a company in financial difficulties) of this Act and to'.

No. 21, in page 16, line 1, after 'to', insert:
'section (Special provision with respect to long term business of a company in financial difficulties) of this Act and to'.

No. 22, in page 16, line 41, leave out from '(4)' to end of line 47 on page 17 and insert:
'above for the purpose of safeguarding any policyholders of a company in financial difficulties in any case where it appears to the Board that to take whatever measures may be required for the assistance of the policyholders in question under sections 6 to 11 above in the event of the company's going into liquidation would cost them less than to take the measures in question under subsection (3) or (4) above.'—[Mr. Deakins.]

Clause 17

GENERAL BUSINESS EXPENDITURE AND LONG TERM BUSINESS EXPENDITURE

Mr. Deakins: I beg to move Amendment No. 23, in page 18, line 18, leave out 'incurred by them'.

Mr. Deputy Speaker: With this it will be convenient to take Government Amendments Nos. 24, 25, 42 and 43

Mr. Deakins: These amendments are linked. I assure the House that these are purely drafting amendments to make the wording of Clause 17(3) and of Clause 21(2) consistent with that in subsections (1) and (2) of Clause 17.

Mr. Tim Renton: I accept that these are intended to be only drafting amendments. However, I should like to ask the Minister one question on Amendment No. 23. This amendment, which refers back to a new clause moved earlier by my hon. Friend the Member for Faversham (Mr. Moate), relates to administrative expenses incurred by the Board.
The hon. Gentleman will recall that the clause moved by my hon. Friend sought to establish that when the Board incurred administrative expenses they should come before Parliament for approval. We were told that the administrative expenses of the Board were to be covered in the early stages by the BIA or that it had volunteered the assistance of back-up staff, and so forth. Is the intention that, until such time as the Board has to use its statutory functions for the purpose of a rescue operation and thus become involved in other general or long-term business expenditure, the BIA will be stepping in and bearing the administrative expenses? This is somewhat unusual.
It is then intended that the administrative expenses of the Board shall be allocated in part to general business expenditure and in part to long-term business expenditure. Only at that stage will payment be made effectively by the levy on the policyholders.
That seems to be a matter requiring clarification. In an earlier debate the provision covering administrative expenses within Clause 17 was not mentioned. I think it will be helpful to the

House if the hon. Gentleman will explain how the administrative expenses will be handled.

8.30 p.m.

Mr. Deakins: The amendments are directly concerned not with administrative expenses but with alteration to the wording so as to define more clearly the powers of the Board. The difficulty that the amendments were designed to overcome is concerned with the total expenditure of the Board, covering administrative expenses and the general nature of the Board's operations. The wording in one part of the clause is slightly different from that in another part. That difference could give rise to some considerable doubt whether the Board is able to impose levies in Clauses 18 or 19 to finance expenditure.

Mr. Tim Renton: I thank the hon. Gentleman for giving way. I do not think he can get out of the matter in that way. The fact is that Amendment No. 23 alters a sentence that at the moment reads:
any expenditure incurred by way of administrative expenses".
It alters the sentence to read:
any expenditure incurred on their administrative expenses".
The amendment, whether or not it is intended to be a drafting amendment, deals with the question of the Board's administrative expenses. It is on that matter that I should like some clarification in view of the comments that were made earlier this evening.

Mr. Moate: Before the Under-Secretary of State answers that point—

Mr. Deputy Speaker: It is unusual and untidy to have two interruptions before a Minister answers. No one who occupies the Chair likes that to happen. However, I call the hon. Member for Faversham (Mr. Moate).

Mr. Moate: Thank you, Mr. Deputy Speaker. I wish to seek clarification on the same point as that raised by my hon. Friend the Member for Mid-Sussex (Mr. Renton). It seems clear that the clause comes within the heading of:
Levies on the insurance industry to finance the performance by the Board of their functions".
Furthermore, it limits expenses to Clauses 15 and 16, which relate very much to the


exercise of the Board's functions in the context of a rescue operation in the broad sense of the term. Nevertheless,
any expenditure incurred by them by way of administrative expenses in performing their functions under this Act
seems to open the field once again. I hope that the hon. Gentleman will be able to reassure us that it is not possible for the Board to incur general administrative expenses which can subsequently be recovered by levy except in the context of an insurance company and a rescue operation being mounted.

Mr. Deakins: The British Insurance Association will undertake expenses for the time being. The Board will be able to come to a convenient arrangement with the BIA for repayment if the Association should require it. That is a matter for the Board to work out with the BIA. In this context we should remember that the people who finance the BIA are largely the same people who will be paying the levy.

Mr. Moate: That is not a very satisfactory situation. The Board does not have powers to borrow except in the context of its powers subsequently to raise a levy. It is not right to suggest that it has the power to enter into an agreement with the BIA to repay subsequently any expenses that may be incurred. It must be clear that any expenses incurred by the Board will be lost by the BIA. The BIA will have no power to recover them and the Board has no power to concede them.

Mr. Deakins: Whatever arrangements the BIA comes to with the Board are a matter for the BIA. I am assured that the Board would not be deprived of the powers it has in this measure in coming to that sort of arrangement.

Mr. Higgins: I feel that the Minister is getting into something of a tangle. Perhaps he might like to consider whether a more comprehensive statement should be made on this matter on Third Reading. We can then consider our position between Third Reading and when the Bill goes to another place. At the moment I am not happy with the Minister's reply. This matter did not arise in Committee and it is assiduous of my hon. Friend the Member for Faversham (Mr. Moate) to have raised it now.
As I understand it, the Government are proposing that the Board shall be effectively provided with resources by the BIA. First, is that the position if there is no failure of any sort? Secondly, is it still the position if there is a failure? The position would seem to be that if the finance is to be provided by the BIA it has no powers to claw it back from anyone by borrowing and rolling it over or by raising a levy.
I should be grateful if the Minister would intervene and tell us a little more about this. I think that his hon. Friend the Member for Farnworth (Mr. Roper) is getting increasingly unhappy, and I think that a few explanatory paragraphs in the Third Reading speech might be helpful. I was surprised not to find a Money Resolution to the Bill in the first place. The arrangement now negotiated seems somewhat curious.

Mr. Roper: I apologise for not being here when the hon. Member for Faversham (Mr. Moate) moved the amendment in which he uncovered this relationship with the BIA which we are considering again. Whatever we think about the Association—and I suppose I have said some unkind things about that august body on other occasions—and in spite of its expertise, there is here a problem about which the House should hear a little more.
I hope that on Third Reading the Minister will be in a position to say rather more about this relationship, how far it will ensure that the Board is at arm's length from a body that is a trade association in the industry, and whether there is any precedent for a statutory body having this sort of relationship with a trade association.

Mr. Deputy Speaker: The Question is—

Mr. Higgins: rose—

Mr. Deputy Speaker: Does the hon Member wish to speak again?

Mr. Higgins: I do not think that I am entitled to speak again. I merely wanted to ask whether the leave of the House would be given if the Minister wished to reply to what has been said. It is unsatisfactory for us not to receive a reply from the hon. Gentleman.

Mr. Deputy Speaker: We have been rather untidy in our debate for some time, and I give the Minister leave to reply if he wishes.

Mr. Deakins: On a previous Bill I incurred the displeasure of the Chair, quite rightly, for speaking three times. I take the point that has been made, and a fuller explanation of the matter will be given on Third Reading.

Amendment agreed to.

Amendments made:

No. 24, in page 18, line 20 leave out 'incurred by them'.

No. 25, in page 18, line 22 leave out 'incurred by them by way of' and insert 'on their '.—[Mr. Deakins.]

Clause 18

LEVIES ON INTERMEDIARIES

Mr. Higgins: I beg to move Amendment No. 28, in page 18, line 37, leave out 'it shall be the duty of the Board to' and insert:
'the Board may'.

Mr. Deputy Speaker: With this we are to take Amendment No. 45, in Schedule 2, page 31, line 33, at end insert:
'or (c) unless a levy is also raised on authorised insurance companies'.

Mr. Higgins: In Committee we debated at length and on several occasions whether authorised intermediaries should be included in the Bill and, secondly, the precise basis on which they should be included if it were decided to include them. One of the points that emerged between the beginning of the Committee stage before the recess and the meeting of the Committee after the recess was that many of the broking organisations—I think I am right in saying all four of them—were concerned that the proposals in the Bill for the claw-back of commissions might be copied overseas and that that could have a serious and deleterious effect on our balance of payments position. It emerged, surprisingly, that apparently no serious analysis of this had been carried out by the Department, nor had any consultations been held until shortly before the clauses concerned were reached. We therefore urged the Minis-

ter to keep an open mind and to look into the matter between then and Report.
The clause covering intermediaries was not in the original draft of the Bill—it was inserted in another place—but the general feeling was that, if brokers had been involved in selling policies with a particular company which then collapsed, there was some case for a levy, or, more effectively, a claw-back being raised upon them. That is a simple and straightforward argument which can be easily understood.
But at the same time we should not take action which could adversely affect the economy as a whole. We therefore sought to alter the position so that we came back more to a central position and agreed at the end of the Committee that we should treat the whole matter with an open mind. This amendment rather takes us back to where we started, which reflects the fact that we should look at the question afresh in the light of further evidence. I hope that the Minister has been able meanwhile to have intensive consultations with the broking interests and to form a view of the importance of this situation.
The reason that the matter arises on this amendment is that, if the duty on the Board is removed and it is given discretion to take action of this sort, the repercussions overseas will be lessened. That is something for the Government to consider.
The second point which is covered by the amendment which is linked with this one—I almost said, "for reasons which remain obscure," but I am sure that I should not say that—is whether, if a collapse takes place, it is right that the levy should be made or the commission clawed back from brokers when no levy is made on the companies to finance the rescue. In a sense, this is an academic argument because it is difficult to envisage a rescue which required so little money that clawing back the commission from the brokers would be sufficient to finance it. But at the same time there is a feeling of unfairness that the situation I have described could arise.
Perhaps the Minister has a strong counter-argument—I am open to persuasion—but it seemed right to us, since the arguments were not exhausted in Committee, to revert to that point. But


the main argument is the first one: it would be very sad if the Bill damaged our overseas earnings. The sums involved, I understand, are very great and the importance of our invisible earnings cannot be overestimated. They are not even, I think, overestimated by the Government's balance of payments seasonal adjusters, who are capable of overestimating or underestimating anything.

Mr. Clinton Davis: The House will find itself in some difficulty in dealing with the amendment. When the Government introduced amendments to these provisions in Committee, we were taken to task for trying to give the Board some discretion in the exercise of its powers to levy intermediaries. Some of the arguments that I sought to adduce may have been misinterpreted because I did not have that intention in mind.
We accepted the validity of the argument and the clause now imposes a duty to levy intermediaries who have received the necessary amount of income in the circumstances specified. The hon. Member for Worthing (Mr. Higgins) is now seeking to make the clause discretionary again, but in a way that we had not contemplated at the outset.

Mr. Higgins: I hope that I can explain that. My point simply was that I thought fresh evidence had emerged at a late stage from the brokers, who are emphasising this point about the balance of payments. To some extent it is a peg on which to hang the argument because I am sure that the Minister is anxious to enlighten the House on the balance of payments and it is difficult to see where else he will be able to do so.

8.45 p.m.

Mr. Davis: I suppose for that reason I should be grateful to the hon. Gentleman and not rebuke him.
I will deal not with the seriousness of the amendment but only with the peg upon which it hangs. I said in Committee that I would be very concerned if it could be established that the clause was likely to damage insurance interests overseas. The hon. Gentleman took that point as being the only really substantial point upon which he himself was prepared to debate the issue. But having looked at the position afresh—of course, the Government have held their discus-

sions with insurance interests and I myself have discussed the matter in some detail with the various insurance interests at considerable length—I do not really see that an effect of this kind can necessarily occur.
It is argued that overseas administrations might simply imitate this clause. That view is based on the argument that we in this country have a leading position in insurance and that, therefore, others might follow the precedent we have established. But that in itself is not a route which is worthy of much exploration because the clause applies only to long-term business. No extension into the general field is contemplated. Long-term business, in fact, as I understand, accounts for a very small proportion of our total overseas insurance earnings.
The levy will apply only to intermediaries who have done substantial business with the failed company. Foreign brokers who channelled business through Lloyds in the past would have no cause for concern unless, of course, one were to postulate that some companies are more prone than others to failure.
It is argued that overseas governments might introduce a different or more sweeping levy on intermediaries and that they would be able to quote the British clause as a valid precedent. If they want to introduce some claw-back principle of their own which would be damaging to us, they will do it regardless of whether or not we have invoked this clause.
My Department's research has indicated that the fears which have been expressed to us have not been made out. I hope they will not be made out, but experience, of course, will let us know. Anxieties, however, are very difficult to estimate as real possibilities. People in a negotiating position always put the worst possible gloss on a situation if it can redound to their advantage. That there are some anxieties there is no doubt, but I think this is essentially a negotiating position, and I do not think that the fears which have been expressed have anything like the substance which they are purported to have.

Mr. Higgins: The hon. Gentleman will, of course, accept that the position, so


far as concerns legislation in, for example, Washington, follows on very subtle points, very often with massive pressures building up. If one lobby or the other can say that there is a precedent for this in another country affecting that country's nationals, that is a point which the hon. Gentleman, I am sure, will not accept totally as without importance. I think it is a real fear, and I hope the hon. Gentleman will bear that in mind.

Mr. Davis: I am well aware of pressure lobbies in Washington and New York, and that arguments will be adduced which are suitable to meet the case of those who put forward those arguments. If we were simply to resile from the position, if the House were to say "We do not want to pursue this at all", I have no doubt that it would be argued that we were doing this for our own benefit and that there was nothing to deter the Americans, if it was in their interests to do so, from pursuing that line. It is, as I have indicated, a fear that is exaggerated. I hope that my views on that matter will be borne out by events.

Mr. Michael Shersby: I am sure that the Under-Secretary appreciates that this is a serious matter. The whole question of our overseas earnings is one which hon. Members will want to think about carefully. I hope that there will be an opportunity to consider this aspect of the matter again when the Bill returns from another place. There is always the danger of overseas repercussions which are not easily seen when this type of provision is first considered. We do not want to get into the position in which the brokers have to pay and the company does not. This could possibly lead to repercussions and reverberations overseas of a kind we cannot easily foresee.
It is for this reason that we are discussing this aspect of the matter this evening. I hope that the Under-Secretary will be willing, as he always is, to have regard to our serious concern about this matter and will, if necessary, take a further look at it before the Bill finally completes all its stages in Parliament.

Mr. Roper: I hope that my hon. Friend the Under-Secretary will continue to resist this amendment in spite of the arguments advanced for overseas earn

ings. This problem should be taken seriously. Together with other hon. Friends, I have not received from brokers significant evidence about long-term business. The amendment would place a majority of members of the boards of insurance companies in an impossible position if they had this discretion. The less they recovered from the intermediaries, the less they would have to levy on themselves. This argument was developed at some length in Committee and was accepted by the Opposition.
I believe that it is better for us to keep the clause as it stands and not to permit this sort of discretion by laying down, as we have in the clause, precisely how much should be contributed.
I turn to Opposition Amendment No. 45. This takes up the point which the Opposition made in Committee, that we should not have a situation in which only the brokers should pay. This point has just been made. Clause 18 imposes a duty on the Board to impose a levy on intermediaries on the scale which is set down, although if the Board does not need the whole amount which is required under the scale, it is obliged to refund the excess in accordance with subsection (7). Therefore, in the case of a particular failed company if, under the clause, the levy from the intermediaries were to raise more money than the Board's expenditure in connection with the company, Amendment No. 45 would presumably require the Board to impose only a nominal levy on the companies. Otherwise it would have to pay more back to the brokers. Technically, therefore, Amendment No. 45, as drafted, is probably defective.
The principle which was established by the clause in another place and which was argued for strongly in Committee, that the intermediaries should pay first on the scale laid down in the clause before the insurance companies were levied, is the right one. I hope that that will be maintained by resisting these amendments. It was the intermediaries who had received a substantial benefit from the failed companies, whereas the policy-holders in other companies had no connection with those failed companies.

Mr. Moate: I have on previous occasions declared my interest as an insurance broker. My concern about this clause will, therefore, be self-evident to a


degree. I should make it clear that any interests that I have in insurance broking are little affected by this proposition. Equally, most of the leading members in the insurance brokers' associations who have been making representations to the Government would not be affected a great deal financially by the clause as it stands. I emphasise that, because the concern is not so much with the financial implications for these companies, many of which do a very small amount of life business in relation to their overall brokerage, as with the principle. It is about the principle that I want to talk.
I am concerned about the effect of the introduction of this principle on the position of British insurance abroad. I think that the Minister discounted this matter a little too easily. It is a much more important matter than he allowed. I am concerned that as a principle it is unfair. I am also concerned about the possible uncertainty it could cause in certain circumstances in company balance sheets. It is a difficult contingency to evaluate.
When Nation Life collapsed, and when any other company collapses or is likely to collapse, there was and will be criticism of the brokers or salesmen who have been most active in selling the policies. Obviously there are bad brokers as well as very good brokers. Selling methods can be criticised, as they can be in most areas of salesmanship. There can be very few hon. Members present tonight who have not taken up the cudgels on behalf of constituents when there have been examples of bad salesmanship. We are all concerned that there should be proper measures of consumer protection in regard to life insurance policies and to protect the public against unsatisfactory methods of selling insurance.
However, a great deal of the clamour that arose at the time of the Nation Life collapse, which has been echoed earlier tonight in the Chamber, was unfair and misinformed. I do not believe that the brokers as such were guilty parties in this matter.
I regret very much that in another place their Lordships introduced this principle into the Bill, and I think that they did so on a basis of misinformation. Admittedly, the principle has been amended somewhat, before it arrived at

its present condition, but I regret that on this occasion the Government have seen fit to accept what their Lordships have done when on almost every other occasion recently they have decided to reject the advice of their Lordships. That is equally a matter of great regret.
However, if an insurance company gets into financial difficulties, whose fault is it? Is it the fault of the broker or the salesman? No. Clearly it is the fault, principally and primarily, of the managers of that company. But equally, because of the powers of supervision that the Department of Trade has accepted, it is now the fault of the Department of Trade. If a company is giving excessive benefits, excessive commissions or bad policies, surely it is up to the Department of Trade to spot this at a fairly early stage and to intervene. One cannot blame the brokers for continuing to sell a company's policies when presumably they have the assurance that the company is sound because it has not been prevented from underwriting by the Department. It is a little unfair to blame salesmen—leaving aside bad salesmen who may be selling wrong policies or using bad tactics. We cannot lay the blame at their door, vet that is what the clause seeks to do.
Let us assume that in the event of a liquidation there are others who have acted irresponsibly and have contributed to a company's downfall. Incidentally, to the extent that I understand the Nation Life collapse, that was not brought about by excessive commissions or, initially, through over-generous benefits. As I understand it, the collapse arose as a consequence of the collapse of its parent company, when it became clear that it was a very badly managed company in regard to its property portfolio.

Mr. Roper: While the hon. Gentleman may be right that it was the investment policy of the parent company which was responsible for the final collapse, will he not admit that that company and, indeed, many of the others which have failed in recent years have been the companies which have been paying excessively high new business commissions?

Mr. Moate: I do not know how to define excessive commissions. There are other highly reputable companies—indeed, some of those which have stepped in, as I understand it, to bail out the


others—paying equally high commission rates, and rates higher than the commission rates normally agreed with the Life Offices Association.

9.0 p.m.

Mr. Peter Viggers: Does my hon. Friend agree that there are various ways of selling insurance policies? One way is to give large commissions to brokers. Another way is to give fairly small commissions to brokers but to spend a great deal on advertising. Why is the broker singled out in this provision and not the advertisers, who might also benefit from the sales methods?

Mr. Moate: My hon. Friend makes a valid point. The judgment about the insurance company must be made not on the basis of the commission rates it offers to the brokers but on the effect of that and other expenditure on the company's soundness. The only people who put themselves in a position of judging the company's soundness are the Minister and his departmental officials.
I do not understand, except as a result of the publicity that they have attracted, why brokers have been singled out for this treatment. We are concerned with a major principle of liquidation. The Government are saying that the brokers are a body of people from whom money can be recovered. What about other parties? Let it be assumed that an insurance company has produced unreal profits in a given year and that in the following year it collapses. Presumably the Inland Revenue will have done nicely from the company in the previous year. Should not the Revenue be made to refund some of the moneys it has made?
What about the company's auditors, and everybody else who has participated in the company? Should not all of them be made to repay something to the creditors? It could be argued that they should. Why is it just the brokers who are selected?
Some of the brokers might well have been employees of the company. There are different categories of broker. Some brokers are salesmen. Some are neo-employees of the company. If they are receiving a high rate of commission from the company, why should not those highly-paid staff or directors of the company be

made to pay back some of their remuneration?
There are other principles involved, trespassing on the whole question of the processes of liquidation. We heard earlier how unsatisfactory the processes of liquidation are, particularly in the context of insurance companies handling life business, but, more generally, right across the board. Many companies take years to be liquidated and the ultimate beneficiary is usually the liquidator or the lawyer. It is seldom the creditor. I hope that the Minister will use the time he now has to endeavour to improve these measures and to ensure that creditors get a fair deal.

Mr. Ron Thomas: Is there not a personal relationship, often one of confidence, between brokers and clients? A person who receives a letter from a broker with a string of degrees after his name tends to think that the broker knows something about the business. Does the hon. Gentleman suggest that brokers should say in every letter they send out "We know nothing about the creditworthiness of the company."

Mr. Moate: It has never been the case that a broker is expected to pass judgment; it is not part of his professional duty to make a judgment about a company's financial stability. I agree wholeheartedly that there is a close relationship between a broker and his client and that a client will, to a large extent, depend upon the advice given. Most brokers must assume—I am talking, not necessarily about large City brokers, but about bank managers and small brokers throughout the country—that a company which is still allowed to operate by the Department of Trade is solvent. That is an assumption they are entitled to make. We have heard how many Nation Life policies were sold by reputable brokers and bank managers.
The ultimate responsibility goes back to the Department and the managers of the company. If one wishes to expand the principle of clawing back money from the people involved—whether agents, employees or the Inland Revenue—that is a matter for consideration, but why pick on brokers alone? The case has not been made out for this trespass on


a major principle in the liquidation process.

Mr. Deakins: Surely brokers are professional advisers? Is the hon. Member saying they would be exempt not merely from the obligation to tell potential policy-holders about the firm whose policies they were selling but from civil action for negligence if they sold a policy of a company which subsequently collapsed?

Mr. Moate: I do not think there has ever been a case of professional negligence held against a broker following the collapse of a company. The broker cannot be held responsible. Admittedly, if I were a client I would kick my broker left, right and centre if he sold me a policy of a dud company, but as the law stands he is not responsible for that. We would be clawing back from them and not from others. This is a principle we ought to examine in far greater depth.

Mr. McCrindle: There are three elements in the sale of a policy—first, the policyholder who, up until now, has had little redress but who has been given some redress by this Bill; secondly, the insurance company which, up until now, has been relatively free from responsibility but has some responsibility thrust upon it by the Bill; and, thirdly, the broker who, according to my hon. Friend, should be the only element totally free of any responsibility. If my hon. Friend believes, as I do, that the sale of an insurance policy is an indivisible approach, how can he seek to approve of the impositions in regard to the company and the policyholder without bringing the broker into the exercise?

Mr. Moate: I am not trying to say that the broker should be exempt, but if we bring in the broker, why should we exempt all others involved in a company, up to the point of liquidation? A life policy may be sold by an employee, who receives a salary, or by a broker, who receives commission. That commission is the broker's income, and could have been spent before the liquidation occurs. I have grave doubts about the principle involved here. I apologise for having been drawn into a longer argument on this point than I originally intended.
Only quite small amounts of commission could be recovered by a levy in the

case of Nation Life—probably less than will be received by the Department of Trade for its audit—and it would not have a very great effect on policyholders. This emphasises the advantage of the discretionary power proposed in the amendment, as opposed to the obligation to impose a levy on agents. The amendment is a helpful compromise, and if the Government cannot accept it tonight, I hope they will see whether it could be incorporated in the Bill in another form. We have gone into this matter rather quickly and without enough concern for the principles and practical implications of what we are doing.
Finally, I come to the effect on British business abroad. Britain is a successful international insurance country only because we have operated much freer of restrictions than have other countries. We have been international, where they have built up national restrictions and have scrutinised and supervised their industry in a way which has never been done here. This has allowed British business to be truly international and to spread across the world.
If foreign countries see Britain placing more and more restrictions on its own operations, certainly and ultimately they will try to emulate that to our disadvantage. British brokers earn vast sums abroad, and if we encourage the principle, admittedly restricted to long term—that is, life business, at the moment, though it could be extended—why should not other countries emulate us and introduce claw-back provisions on all brokerage earned in their countries? This would place an enormous contingent liability on British broking firms abroad.
This is a danger which is hard to evaluate, but it exists, and I hope that the Minister will think carefully about this point and also about giving some discretion to the Board before he finally decides to reject the amendment, if that is what he intends to do.

Amendment negatived.

Mr. Deakins: I beg to move Amendment No. 29, in page 19, leave out lines 1 to 12 and insert—
'(2) Subject to section (The exempt income level for the purposes of section 18) of this Act and subsections (3) and (6) below, a person is an accountable intermediary of a company for the purposes of this section and Schedule 2 to this Act if—



(a) he has acted as an intermediary for the company in relation to any relevant long term contract of the company; and
(b) his income from the company in respect of his services (whether as an intermediary or otherwise) in relation to any such contracts (hereafter in this section and in section (The exempt income level for the purposes of section 18) of this Act referred to as "relevant services") for either or each of the two years comprised in the period of two years ending immediately before the time mentioned below in this subsection exceeded his exempt income level for the year in question.'

Mr. Deputy Speaker: With this amendment we may also discuss Government Amendments Nos. 32 and 38.

Mr. Deakins: During the debate in Committee on the Government's redraft of the levy provision, which is now Clause 18, some hon. Members pointed out that it renders liable to levy all of an intermediary's income over £5,000 from a failed company in the two years preceding the policy, whenever the insurance contracts concerned were effected. It was represented to me that it would be unfair for the levy to apply to renewal premiums on long-term policies—pensions policies were mentioned in particular—that had been effected many years earlier, when the intermediary could not possibly have been expected to anticipate a company's failure. This is a reasonable point, and I have provided accordingly that the levy should apply only to an intermediary's income over the exempt level in the two years before the failure in respect of long-term insurance contracts effected during those two years.
This is a much fairer formulation and meets, I think, the main objection to Clause 18 as expressed in Committee by hon. Members and outside Parliament by the brokers.

Amendment agreed to.

Mr. Tim Renton: I beg to move Amendment No. 30, in page 19, line 17, leave out subsection (3).

Mr. Deputy Speaker: With it we may also discuss Amendment No. 31, in page 19, line 25, after 'person', insert 'being an individual'.

Mr. Renton: The purpose of subsection (3) is that salaried intermediaries and those with exclusive contracts, or otherwise often known as tied brokers, should

be absolved from the claw-back on intermediaries in the event of an insurance company failing.
It is hard to see the reason for these exclusions. We are informed from an authoritative source that life assurance is sold in the following proportions: 60 per cent. direct through salesmen employed by or working on commission for a life company; 30 per cent. through brokers; 10 per cent. through such persons as accountants and solicitors. If salaried intermediaries or people working on commission are excluded from the claw-back, a very large number of those responsible for selling the policies whom the Government wish to involve in the claw-back will be exempted.
9.15 p.m.
Here I take a different attitude from that of my hon. Friend the Member for Faversham (Mr. Moate). In logic, if intermediaries are to suffer claw-back, all of them should suffer it. I appreciate that there are difficulties in obtaining claw-back from individuals. They may not have the money to pay. It may be a year or two before the company gets into difficulties, and they will have spent their commission. But the fact is that those on commission in particular have a strong reason to push the policy that they wish the prospective customer to take up. Their remuneration will come only if they succeed in making a sale. In those circumstances it is only human nature that the commission man may not make that full investigation about which my hon. Friend spoke into the background of the company and the financial viability of the policy that he wishes to sell. His main concern will be to sell the policy, because it is only then that he will receive any earnings.
Therefore, in principle, the idea of excluding salesmen, commission men, from the claw-back is wrong, although I accept the difficulty of obtaining the claw-back from individuals. That is the basic reason why my hon. Friends and I have suggested that subsection (3) should be removed.
Amendment No. 31 is more specific. It accepts that individuals should be exempt, although that acceptance means exempting a large proportion of life assurance policies. The purpose of the


amendment is to exempt only individuals, and to make certain that tied brokers are not exempt.

Mr. Roper: Will the hon. Gentleman explain the reasons for the amendment, as the first two words of subsection (3) refer to "an individual"?

Mr. Renton: I thank the hon. Gentleman for asking that question. It is precisely because those words are not repeated in the second paragraph of subsection (3) that we wish to have them in. The purpose of the amendment is to see that a person "being an individual" performing the services in question
must not perform services of a like description for any other insurance company.
We wish to exempt individuals but to catch some tied brokers.
Life not always being as clear and straightforward as we should all like it to be, and brokers making money only when they have succeeded in selling a policy, there is a danger that a broker who has an exclusive agency may pose as someone giving independent advice. When he is seeking business he may not come totally clean with a prospective customer and say "I am acting solely on behalf of the XYZ Insurance Company", so that the customer knows from the start that he has an interest in selling only XYZ policies. The broker may give the impression that he has examined all the policies and thinks that the best one for the customer is the XYZ policy. He may not make it clear that it is only if he sells such a policy that he will earn commission, and that he is permitted to sell only an XYZ policy, because he has an exclusive agency from that company.
Having considered the matter carefully since the Committee stage, we felt that no valid reasons had been advanced why tied brokers who were not individuals should be excluded from the claw-back. I shall listen with interest to what the Minister says, but I hope that, on reflection, the Government will be able to accept Amendment No. 31. We believe that it would make the claw-back from intermediaries more effective.

Mr. Deakins: Concerning Amendment No. 30, I am sure that it would be wrong for insurance company employees, and for full-time representatives of reputable

companies, such as CIS agents, whose position is closely analogous to that of employees, to be subject to the threat of a levy, yet the effect of deleting subsection (3) would be to bring full-time agents within the scope of this clause.
I recognise that the subsection may result in the exemption of certain individuals who should, ideally, be covered—for example, members of a direct selling organisation. There was a reference to them in Committee. But I am advised that there is no way of drafting the clause so as to achieve this without also including people who should not be liable to levy.
With regard to tied brokers, I hope that what I say will meet the hon. Member's point. We propose shortly to deal with the problem of so-called tied brokers, under the regulation-making powers in the 1974 Act, by obliging them in doing business to make known the fact of their tied status. In any case, individual agents-cum-employees, who escape by virtue of this subsection, if they tie themselves to a failing company, are subject to the sanction of losing their livelihood.
I hope that the hon. Gentleman will be satisfied with those remarks and will withdraw the amendment.
I turn to Amendment No. 31. As my hon. Friend the Member for Farnworth (Mr. Roper) pointed out, the introductory words to subsection (3) refer to an individual, and the hon. Gentleman's point was that this did not necessarily apply to the second paragraph. I can assure him that it does. If he looks at the wording of subsection (3) he will see that it refers to a contract of exclusive agency, and that the second part of the subsection, as a separate paragraph, is merely defining a contract of exclusive agency. There is no doubt that the words "an individual" cover all the particular subsection.

Mr. Tim Renton: I was pleased to hear from the Under-Secretary that the Government are proposing to tackle this problem via the Insurance Companies Act 1974, and I understand that effectively, in future, when a tied broker has a contract of exclusive agency he will have to inform his prospective customers of the fact that he is acting as the sales arm for that insurance company and is


not therefore acting as an independent company which, having considered a wide range of policies, has decided to proffer this particular one.
That deals effectively with the point covered in our amendment. In those circumstances I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 32, in page 19, line 27, leave out subsection (4).

No. 33, in page 19, line 43, after 'to', insert:
'section (The exempt income level for the purposes of section 18) of this Act and'.

No. 34, in page 20, line 2, leave out '£, 5000' and insert:
'his exempt income level for that year'.

No. 35, in page 20, line 5, leave out '£5,000'and insert:
'his exempt income level for that year'.

No. 36, in page 20, line 11, after 'section ', insert:
'and section (The exempt income level for the purposes of section 18) of thils Act'.

No. 37, in page 20, line 16, leave out
'the purposes of this section'

and insert:
'those purposes'.

No. 38, in page 20, line 25, at end insert:
'(7A) References in this section, in section (The exempt income level for the purposes of section 18) of this Act and in Schedule 2 to this Act to an intermediary of a company are references to a person who has acted as an intermediary for a company in relation to any relevant long term contract of the company.
(7B) For the purposes of this section a person acts as an intermediary for a company in relation to a long term contract if, otherwise than as an employee of the company—

(a) he invites any other person to take any step with a view to entering into a long term contract with the company;
(b) he introduces any other person to the company with a view to his entering into such a contract with the company; or
(c) he takes any other action with a view to securing that any other person will enter into such a contract with the company.

(7C) In this section "long term contract" means a contract the effecting of which by a company constitutes the carrying on by the company of long term business of either class in the United Kingdom, not being a contract of relevant long term contract of a company for reinsurance; and a long term contract is a relevant long term contract of a company for the purposes of this section if it was effected

by the company within the period of two years mentioned in subsection (2) above. '—[Mr. Deakins.]

Clause 19

LEVIES ON AUTHORISED INSURANCE COMPANIES

Mr. Moate: I beg to move Amendment No. 52, in page 21, line 25, leave out' or (7)'.

Mr. Deputy Speaker: With this amendment we may take the following amendments:
No. 40, in page 21, line 34, leave out subsection (7).
No. 39, in page 21, line 34, at beginning insert:
'Subject to subsection (7A) below'.
No. 41, in page 21, line 40, at end insert:
'(7A) Sums recorded in a company's accounts as paid or due to:

(a) any subsidiary of that company;
(b) any company of which that company is a subsidiary; or
(c) any other subsidiary of any company of which that company is a subsidiary;

shall not be deductible by virtue of subsection (7) above'.

Mr. Moate: The principle raised here is important. The purpose is primarily in order to obtain clarification of the proposals.
Subsection (7) states that the levy is to be calculated from a company's net premium after reinsurance premiums have been deducted. No doubt the Minister can explain this, but at the moment I fail to understand why the levy is not to be applied to the gross premium income of insurance companies.
My general understanding of the Bill is that, should a company fail, there will be a levy applied to certain groups of policyholders to a maximum of 1 per cent. on their policies. That is a simple enough concept. It is what I term a "front end" tax. It applies to the premiums paid. A motorist with a £100 premium could pay a £1 levy on his premium in a year. However, this subsection says that the principle is to be applied not to the gross premium but to the net premium after reinsurance, and this conflicts with my understanding of the Bill.
If a company reinsured 90 per cent. of its business away, it would be left


with only a 10 per cent. net income and the levy would be applied on that, so that the policyholder of that company would pay only one4enth on his gross income. But if the same insurance company collapse caught another motorist, who was paying £100 but his company reinsured not at all, the policyholder would pay the full £1. It is hardly a fair system between the one policyholder and the other.
It should not matter what reinsurance arrangements are entered into by a company. I fail to see why reinsurance premiums have been taken into account in assessing the leviable premium income of insurance companies. I hope that the Minister can advise me on this point.

Mr. Roper: The Minister will recall that in Committee I tabled an amendment in identical terms to that just moved by the hon. Member for Faversham (Mr. Moate) and, after recognising that there were complications in this issue, the Minister agreed to consider the matter. Therefore, I was disappointed to see no amendment from the Government to deal with the problem. I understand that, after full consideration, the Government have decided that it is best to leave the clause as it stands.
This is not a very happy solution. The logical answer would be not to allow the deduction of any reinsurance premiums and to base the levy on the premiums on those general policies entitled to the protection of the guarantee scheme—that is, policies taken out by individuals and not corporate bodies. However, this is thought to be impracticable because insurance companies cannot easily separate the premiums on protected general policies from those on non-protected general policies.
As it stands, therefore, Clause 19 places the general business levy on the premiums on all United Kingdom general policies. That being so, it would be unreasonable not to permit the deduction of reinsurance premiums, since most are paid in respect of the larger policies which are outside the scope of the Bill. Not to permit the deduction of these reinsurance premiums would also bear harshly on smaller companies which pay away a larger proportion of their premiums by way of reinsurance premiums.
But it produces an anomaly, and that is when reinsurance premiums are paid to a connected company within a group. This is a wide open loophole, because an insurance company has only to establish a subsidiary insurance company and then reinsure all its business with the parent company to escape entirely the levy on the subsidiary's business. There are a number of large insurance groups which for valid commercial reasons operate through a number of subsidiaries and reinsure much of their business of subsidiaries in the group. There is no reason why they should not do this. But it is quite wrong that they should in consequence pay a materially lower levy in relation to the premium income than other insurance companies which operate on a unitary basis.
9.30 p.m.
Surely it is right that a group should be treated for the purposes of the levy as if it were a single company, and reinsurance premiums within the group should not be deductible. I understand that the Government considered an amendment in these terms, but rejected it on the grounds that retrocessions are not deductible and hence a reinsurance within the group which is then retroceded outside the group would not be deductible when, in fairness, it might be argued that it should be. They also believed that it would be wrong to make reinsurances within the group not deductible when reinsurances between two unconnected companies, possibly on a reciprocal basis, would remain deductible. I do not And either of these arguments convincing.
There appears to be no reason why a company wishing to reinsure outside the group should first reinsure within the group and then retrocede outside the group. However, if it chooses to arrange things in this way, it must accept the consequences.
On the other hand, arrangements between unconnected companies involve expense and it therefore seems unlikely that companies would choose to incur expense in order to reduce their liability to levy if a levy is imposed. The overriding consideration must be that an insurance organisation which is really a single body, but which for its own purposes chooses to operate through a group of subsidiaries, should not thereby pay


an appreciably lower levy than it would if it operated on a unitary basis. If the organisation is really a single organisation, it should be treated as such, and the amendment which stands in my name and the names of my hon. Friends seeks to do just that.

Mr. Deakins: I should like to deal first with the amendment moved by the hon. Member for Faversham (Mr. Moate). We debated this matter in Committee on an amendment moved by my hon. Friend the Member for Farnworth (Mr. Roper). I do not consider that the hon. Member for Faversham has put forward any more points than those he raised in Committee.
Basically, there is a difference between the treatment of general and long-term business in respect of the definition of net premium income liable to levy. I remind the hon. Gentleman that our original proposals, supported by the industry, was that the levy should in all cases be applied to premium income net of reinsurance. Later, the life offices changed their minds and asked that in the case of long-term business the levy should be applied to premium income before deduction of reinsurance. It was argued that this would be more convenient for the life offices, and would prevent certain offices, which habitually reinsured all their long-term business, escaping the levy although their policy-holders would qualify for protection.
In another place the Government proposed an amendment changing the treatment of premium income in respect of long-term business. The position over general business is rather different. Here, reinsurance of a certain proportion of the risks is standard practice. Many small companies retain quite a small proportion of the premium which they receive, and pay the rest to a reinsurer. These companies would be particularly hard hit by the application of the general business levy to their gross premium income. It is not realistic to imagine that general business companies will in future indulge in widespread reinsurance simply to evade the levy. The industry is responsible. Moreover, as reinsurance costs money, individual insurers will not wish to increase their costs and therefore their premium levels beyond the level of their competitors.
The British Insurance Association is opposed to this amendment. Therefore, on balance, I believe that the hon. Gentleman should consider withdrawing it.

Mr. Moate: What the BIA thinks about it is a matter of complete indifference to me. On this point I speak for myself and not for any insurance interest whatsoever. If companies are to be levied on their net general business income after reinsurance, will it mean that, as the levy is to be passed on to all policy-holders, one policyholder will be treated differently from another in respect of the same insurance company collapse?

Mr. Deakins: The policyholders will pay the levy according to whether it is general or long-term business. In the case of a company which has both types of business, there can be a levy on one class of business, but not on another. One would not be levying it on all the policyholders of that company in respect of both types of business. Have I made the point clear to the hon. Gentleman?

Mr. Moate: I do not think that I could have made the point clear to the Minister. Taking the same class of insurance—a motorist with one company and another motorist with another, but with different rates of reinsurance—is the hon. Gentleman saying that those policy-holders would be paying a different rate of levy?

Mr. Deakins: I am advised that they would not be paying a different rate of levy.
My hon. Friend the Member for Farnworth (Mr. Roper) moved an amendment in Committee to alter the basis of the general business levy. Indeed, he made out a strong case for some change of the kind that he is now proposing. I thought then that it was a good case and undertook to re-examine the matter before Report. I have re-examined the matter in consultation with the insurance industry. In the course of that careful re-examination we looked seriously at a formula remarkably similar to the one now proposed by my hon. Friend, but reluctantly came to the conclusion that it would not be practicable or worth while to proceed in that way.
The present formula for the general business levy rests on figures which are


already available to companies. The formula proposed in the amendment would involve companies producing figures which are not now available and do not need to be identified for any other purpose. I am informed that the amendment, if accepted, would also penalise the arrangement which obtains in some major insurance groups whereby companies in a particular group pool their business for reinsurance purposes before sharing it out in predetermined proportions among their members.
The practice of companies and groups over reinsurance differs widely in detail. Therefore, it is an almost impossible task to devise a formula for the levy which not only meets my hon. Friend's objectives but fits in with the various arrangements in force in the insurance industry.
I accept that if greater advantage were to be gained from the change it would be worth while requiring the companies to alter their practice to accommodate it. However, I am not convinced that is so. Neither we nor the industry foresee any widespread attempts to evade the levy in the ways feared by my hon. Friend. If my hon. Friend's proposal were accepted, it would not entirely eliminate the opportunities available to the determined evader of the levy. On the present formula the levy will be sufficient to cover likely needs. The change proposed will not improve the protection afforded to policyholders under the Bill.

Mr. Roper: I realise that the effect will not be very significant in respect of policyholders, but it will introduce a greater degree of justice between different companies within the industry.
My hon. Friend said that the industry resisted an amendment on these lines. Of course, a trade association, speaking for a whole industry, is always reluctant to accept an amendment which will lead to increased payments for its members. This amendment would inevitably lead to increased payments for companies which operate the group system, as against those which operate on a unitary basis. Does my hon. Friend agree that, despite this resistance by the industry, the amendment, if accepted, would ensure a greater degree of fairness between companies within the industry and that, therefore, he should consider it carefully?

Mr. Deakins: I think that my hon. Friend may have a good point, but given the nature of the Bill, we cannot achieve perfect justice. Perhaps there will have to be a certain amount of rough justice. We have already discovered in Committee, and perhaps even today, that there are certain anomalies. It is in the nature of a Bill of this sort that started its rather chequered career in another place that that should be so. The Bill was fundamentally altered in certain important respects in another place and it has since been altered here in Committee and on Report.
The Bill may not meet the requirements of my hon. Friend and others in the industry who feel that one section has been rather more unfairly treated than another. However, we have honestly done our best to satisfy the needs of the industry. We have had to take full account of the views of the insurance industry as expressed through its association. Any Government must do that.
I know that my hon. Friend has some feelings about trade associations. Perhaps in another context one might like to debate that matter with him. At the same time, Governments have to work with industries. Basically, they must consult trade associations as being representative bodies. Governments do not have time to consult every company. By and large, the views put forward by trade associations must be treated with great respect by any Government as broadly representing the views of the industry. This has happened with the CBI, the TUC and many other important public bodies.
Although the hon. Member may not be entirely satisfied, I hope that he will see fit to withdraw the amendment. We have examined this matter between Committee and Report, as I promised we would, and we have arrived at a conclusion. Although that conclusion may not satisfy him, at least it is reasonable in all the circumstances, given the fact that this is a rather disparate industry. This is the first Bill of its kind that imposes a levy on the industry.

Mr. Moate: In view of the answers I have received, and although I am less clear than I was at the beginning, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 21

SPECIAL PROVISION FOR PERSONS INSURED UNDER CONTRACTS OF INSURANCE NOT EVIDENCED BY POLICIES

Amendments made: No. 42, in page 22, line 33, leave out 'incurred by' and insert of.

No. 43, in page 22, line 34, leave out 'incurred' and insert 'expenditure'.—[Mr. Deakins.]

Schedule 2

ADDITIONAL PROVISIONS WITH RESPECT TO LEVIES ON INTREMEDIARIES

Mr. Deakins: I beg to move Amendment No. 46, in page 32, line 7, leav out 'is' and insert 'appears to the Board to be'.

The amendment is purely a drafting correction.

Amendment agreed to.

Amendments made: No. 47, in page 32, line 8, at end insert—

'2A.—(1) The Board may by notice in writing require any person who appears to them to be an intermediary of any such company as is mentioned in sub-paragraph (a) or (b) of paragraph I above to give to them any information which appears to them to be necessary in order to determine what (if any) persons would be linked with that person within the meaning of section (The exempt income level for the purposes of section 18) of this Act if that person were an intermediary of that company.

(2) A person to whom a notice is sent under this paragraph shall send to the Board within one month of the date of the notice a statement—

(a) giving any of the information required by the notice which he is able to give; or
(b) informing the Board that he is unable to give any of the information required by the notice.

2B.—(1) Any person who causes or permits to be included in a statement sent to the Board under paragraph 2A above any information which he knows to be false in a material particular or recklessly causes or permits to be so included any information which is false in a material particular shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;
(b) on summary conviction, to a fine not exceeding £400.

(2) Any person who makes default in complying with paragraph 2A above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £400. '

No. 48, in Page 32, line 23, leave out sub-paragraph (3).

No. 49, in page 32, line 34, at end insert—
4A. A notice under paragraph 2A or 3 above may be sent by post, and a letter containing such a notice shall be deemed to be properly addressed if it is addressed to the person to whom it is sent at his last known place of business in the United Kingdom. '.—[Mr. Deakins.]

Motion made, and Question proposed, That the Bill be now read the Third time.

9.42 p.m.

Mr. Higgins: I was not expecting to be called at this stage, Mr. Speaker, as I understood that the Government had given an undertaking that they would give an explanation on a particular matter at the conclusion of our deliberations on Report. However, I shall now make my comments on Third Reading.
This Bill has had a singularly chequered career from the moment it started—indeed, before it started—its passage. The entire House, except for the Minister, was against it. That was the position before it was introduced or published. We have done all we can to improve it, but it is still a remarkably complex measure. It is riddled with anomalies and difficulties. I do not think that we can be happy with the result, despite the immense amount of hard work that many hon. Members have put into it. I am still concerned about the possible repercussions it may have on invisible earnings. I hope that that is a matter the Government will be prepared to consider between now and when the Bill goes to another place—the place from which it originated through no fault of that place.
I think that the best thing we can do is to press the Government as hard as we can to introduce regulations which will prevent the collapse of insurance companies. That will mean that the Bill will not be necessary. I have serious doubts about the consequences that will flow if the Bill is ever operated. I am sure that the right approach is to ensure that collapses do not take place. We shall urge the Government in that direction.

9.44 p.m.

Mr. Roper: I support a good deal of what has been said by the hon. Member for Worthing (Mr. Higgins). As I have made clear on a number of occasions, I regard this as an unsatisfactory Bill. But in the present state of the industry it would not be right to vote against what must be an unsatisfactory long-stop. It would not be right to vote against the Bill. However unsatisfactory it may be, if an insurance company were to get into difficulties tomorrow the policyholders of that company would look to us with that responsibility.
It is therefore with reluctance that one has to support the Bill on Third Reading. I have never believed that the Bill was significantly improvable, but in so far as it has been improved that is due largely to the efforts of my hon. Friends in the co-operative group in this House and in another place. They have played a useful part in improving what was an extremely difficult Bill to improve.

9.45 p.m.

Mr. Moate: I, too, have found the Bill objectionable in principle throughout, and I have felt throughout that it was not capable of being improved to a point where I could support it. I voted against the Bill on Second Reading. I have no intention of rehearsing the arguments put forward then, but I feel that it would be a forlorn gesture to vote against the Third Reading.
I still believe that the Bill will be unsatisfactory in its operation and unfair not just on policyholders but also on those representatives of insurance companies, particularly those operating in the home service area of insurance, who will have greater difficulty in selling the insurance policies of stable, reputable companies against the high pressure selling of the less established and less reputable area of insurance. We do them a disservice, and we do the public a disserve, and I regret that the Bill has proceeded as it has done.
This measure is still full of anomalies. The Government are aware that that is so, and I hope that they will take what opportunity is left to tidy up some of the points that have been expressed as the Bill has proceeded both in Committee and on Report. In particular, some surprise has been expressed at the way in which the Board will apparently live under the umbrella of the BIA. I am glad that there

will be this close rapport and working relationship between this statutory body and the industry or the BIA—because not every company is a member of the BIA.
That leads me to my last point. If one can have that closeness of operations within the City of London, I suggest that the Minister looks again at the proposition advanced on a number of occasions that all the functions embodied in the Bill, in the 1974 Act and in previous Acts should be passed to a Registrar of Insurance Companies who would be far more sensitive and have far greater expertise than the Department could ever command, and not simply because it is staffed by civil servants and not commercial operators. He could operate in the same way as the Minister is proposing the Board should operate, in close conjunction with the BIA.

9.48 p.m.

Mr. McCrindle: My main regret as we come to the end of this parliamentary marathon is that the Bill was ever necessary. I regret that it proved impossible for the insurance industry to come to a satisfactory solution which would have prevented our having to sit all these long hours in Parliament. Nevertheless, that was not possible, and I think that one must therefore reluctantly accept that the Bill, by providing a protective cocoon around policyholders, is to be given a qualified welcome.
I do not need to tell Ministers that they cannot and will not be expected to slacken their supervision of insurance companies, but I hope that nor will they suffocate initiative on the part of these companies. I have no wish to defend the failed companies of the last few years whose great besetting sin appears to have been to invest in commercial property at a time when to invest in bricks and mortar was seen as the best protection against inflation. The irony was that it was inflation in the commercial property field that killed so many of the insurance companies. Perhaps I may be forgiven for saying to insurance companies that the moral is to spread investments and never to speculate with policyholders' money. But that is different from saying, "Do not be adventurous, or invest in new companies, or in anything but gilt-edged securities".
The Bill will succeed only if it is never invoked. The insurance companies have


been given fair warning by this Bill and the Insurance Companies Act 1974 that Government control over their activities is becoming tighter and tighter as time goes by and that unless they see the red light which shines forth from the Bill they cannot be surprised if that control tightens still further. I hope that they will recognise this and put their house in order, thereby giving the public the reassurance that they require that this will be the last such Bill to come before the House.
The inclusion of brokers is controversial but I repeat what I said in Committee—that the image of the insurance industry is indivisible. If brokers want this to be the end of it they should work hard, on the voluntary basis that they agreed with the Secretary of State, to put their house in order so that there will be no further need for Government intervention in their activities.

9.51 p.m.

Mr. Clinton Davis: It is with some sadness that I wind up after hearing the last words on this subject from the hon. Member for Brentwood and Ongar (Mr. McCrindle), who has given us a great deal of education and the benefit of his experience throughout our debates. I am sorry that this is definitely his last performance for the time being.
My hon. Friend undertook that I would speak about the immediate administration expenses of the Board. There is no requirement for a money resolution, since there will be no expenditure of public funds. The Board can finance its administrative expenditure only by means of a levy, but it can postpone the levy by borrowing and, in the circumstances that we contemplate, when it will not be carrying out immediately any statutory functions, it would be absurd to levy the entire industry to cover its minor expenses.
Clearly, the Board may require some minimal services to begin with, and I am delighted that the BIA has responded. I do not believe that there is any sinister implication in that. The Board has complete freedom to make its own arrangements. It has been helped in this respect, but if a company fails and the Board has to undertake its statutory functions.

it may have to revise its arrangements. That is entirely a matter for the Board. The Department will not interfere, but no doubt the members of the Board will bear in mind the anxieties expressed tonight and ensure that the public are aware of its complete legal separation from the BIA.
I do not wish to rehearse the arguments in favour of the Bill. I have listened to many in the last few months and found it remarkable that the hon. Member for Worthing (Mr. Higgins) should have said that the whole House has been against it. We have benefited from the contributions of hon. Members with expertise and of all sections of the insurance industry and in particular of the companies, the BIA, the Life Offices Association and the Federation of Insurance Trade Unions, with which I had many fruitful meetings.
The Bill has been improved as a result. It represents an important step forward in ensuring that people do not have anxieties and hardships to anything like the extent that they have suffered in recent years. As I have always said, this is simply a long-stop measure. I endorse the hopes of the hon. Member for Brentwood and Ongar that it will never be invoked. I hope it never will be. It is the obligation of the Department of Trade to proceed with the central part of our strategy, which is a more sophisticated method of surveillance to try to ensure that insurance companies do not collapse as they have collapsed in the recent past. The help that we shall obtain from non-statutory advisers will ensure a considerable improvement in the way in which we can undertake those methods of surveillance. That is a new feature. I hope that it will work; indeed, I have every confidence that it will.
I merely say, in conclusion, that those hon. Gentlemen who have urged us to press on with these regulations need have no fear. This is our anxiety as much as it is theirs. We simply believe that the Bill is an essential complement to our supervision of companies, and I commend it to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

LOCAL LAND CHARGES BILL [Lords]

As amended (in the Standing Committee), considered.

Clause 1

LOCAL LAND CHARGES

9.57 p.m.

Mr. Graham Page: I beg to move Amendment No. 1, in page 2, line 23, at end insert—
'(dd) any exercise of a power of compulsory acquisition of land by a Minister of the Crown or government department or a local authority or other public body as may be prescribed'.

Mr. Speaker: With this we are to take Amendment No. 20, in Clause 14, page 10, line 30, after 'power', insert—
'(a) to make rules defining the acts which shall constitute the exercise of a power of compulsory acquisition and which shall accordingly bring a local land charge into existence for the purpose of paragraph (dd) of section 1(1) of this Act; and (b)'.

Mr. Page: This amendment provides an additional paragraph to Clause 1. The Bill gives effect to the recommendations of the Law Commission's 62nd Report on Local Land Charges. The recommendations were that neither the failure to register a local land charge nor the failure to disclose it on an official certificate of search would nullify and invalidate that land charge, but that in place of that the purchaser or mortgagee would be entitled to compensation if by that failure he suffered loss. Therefore, in Clause 1 there is set out what is a local land charge, or what shall be a local land charge in future, and Clause 2 sets out what shall not be a local land charge and shall not be registrable.
This sounds all very technical, but it is very practical. The point is that the register is there to assure the purchaser of a house or any other property that he is not buying a pig in a poke—at least, certain kinds of pigs. Suppose that having bought the pige, poke and all, he extracts the pig from the poke and finds stamped on its hindquarters "This pig belongs to the Accrington District Council", he might reasonably say "Why did you not put that on the poke so that I could see that this was happening"?
The same applies when buying a house. If the house is subject to a compulsory purchase order, it is right that the purchaser should be well informed of the fact by its being registered. Indeed, laymen have said to me that, having heard about the local land charges register, they think that one would find out everything to which the house may be subject by searching—in short, that all compulsory purchase orders are registered on that register, which is not so.
A report on this very subject, which we know as the Stainton Report—a Report of the Committee on Local Land Charges—said in January 1952:
There is probably no question of more importance to a purchaser than the question whether the land he is buying is likely to be taken away from him in the near future. We have been informed, and many members of the Committee know from their own experience, that land threatened with compulsory purchase is practically unsaleable. Yet a purchaser's powers of obtaining information on this question are confusing and obscure.
The Report then recommended that compulsory purchase orders should be registered local land charges.
The Law Commission's Report on which this Bill is based did not go so far as to say that, because the Commission felt that it was outside its terms of reference.

It being Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

Ordered,
That, at this day's Sitting, the Local Land Charges Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Harper.]

Bill, as amended (in the Standing Committee), further considered.

Mr. Page: The Law Commission's Report, on which the Bill is based, did not recommend tha compulsory purchase orders should be registered because it felt that that went outside its terms of reference. However, it called attention to the fact and, after discussing the question, said that it doubted whether it was satisfactory that compulsory purchase orders did not appear as local land charges. The Commissioners said that although they regarded the matter as one which lay outside the scope of the Report, they


would welcome consideration by Ministers of the question whether such orders should be made registrable.
In tabling this amendment I hope that I have opened the door to the Secretary of State. At this stage I am asking not that a list of compulsory purchase orders of various types should be set out in the Bill and made registrable but that the Secretary of State shall have power to prescribe which compulsory purchase orders, whether those made by a Minister, by local authorities or by other public bodies, should be registrable at some future date. In short, I want the investigation which the Law Commission recommended and I want a decision taken on the way in which a purchaser or mortgagee should be protected by that form of registration on the local land charges register.
This would give far greater protection to the purchaser than is afforded now by the register and would not involve great expense or trouble. It is for the registering authority to ensure that the order is put in the register, but this will not increase the expense of keeping the register by any significant amount.

Mr. Patrick Mayhew: I warmly support this amendment. I can give my reasons for doing so in about three sentences.
The purpose of having a local land charges register is to give assurance to purchasers of houses that their tenure will be secure and that they will not find that it is disturbed or threatened by rights enjoyed or alleged to be enjoyed by other people, of which they prevously had no notice.
The Englishman's home is still regarded, however romantically, as his castle. If we are to defend our castle, there is not much point in posting sentries at some but not all of the postern gates. I hope that the amendment will be accepted.

Mr. Bruce Douglas-Mann: I appreciate the difficulties of my hon. Friend the Minister in accepting this amendment. I want to express my support for the spirit of the amendment, although if it were to become part of the Bill it would create difficulties. Nevertheless, I am sorry that

my hon. Friend has not found it possible to accept the amendment which was urged upon him in Committee.
When anyone buys a property one thing he most needs to know is whether it is likely to be the subject of a compulsory purchase order. For this information to be provided as of right by virtue of the searches is highly desirable. I accept that administrative problems are involved and, therefore, at this stage I shall not press the point. However, I want to record my regret that it has not been possible to accept the amendment.

The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): As the right hon. Member for Crosby (Mr. Page) and my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) will know, I have the utmost sympathy with the motives that led the right hon. Gentleman to table the amendment. He tabled a similar, if differently worded, amendment in Committee. In Committee I also expressed my sympathies with him.
Ideally I am at one with the right hon. Gentleman. Ideally I should like to see compulsory purchase orders registrable. I should like to see them entered in the local land charges registers. However, the right hon. Gentleman knows, and I think that the House knows, that they are not registrable at present. They never have been registrable and, indeed, it was never the purpose of the Bill to make them registrable.
The Bill is based upon the Law Commission's Report. It it is a narrow Bill. As the right hon. Gentleman has rightly said, the Law Commission regarded compulsory purchase orders as beyond the scope of its Report—the Report upon which the Bill is based—and they were left out of the draft Bill which was the creature of the Law Commission and attached to that very Report.
I know that the Law Commission expressed doubts. Indeed, the Commissioners are not the first persons to have expressed doubts. The Stainton Committee expressed doubts. The right hon. Member for Crosby was a Minister in the Department of the Environment, and no doubt that same Report was on his desk at some time or other. He will know that the matter is extremely complicated.
The Law Commission has said that it would welcome consideration by Ministers of the question whether such orders should be made registrable. In Committee I assured the right hon. Gentleman that Ministers had taken that warning and exhortation to heart. However, I am afraid that I cannot accept the amendment at this late stage of the Bill.
This Bill "modernises the mechanics" of the local land charge system. They are the words of the Law Commission. The Law Commission did not set out a fundamental review of the matters which are or might be registrable. It did not set out to add or create new land charges. It was never the purpose of the Bill that it should include a new category of land charges.
I should like to deal specifically with the amendment. The right hon. Member for Crosby is an expert on statutory instruments, orders and rules—a far greater expert than I am. He will know that it is plainly inappropriate that the power to create land charges should be exercisable by subordinate legislation, which is what he is suggesting by the amendment. The creation of a local land charge is a matter for statute, because the status of a local land charge is plainly one for substantive law, with major consequences attaching to it, including, as the right hon. Gentleman will know, a potential liability on public funds. Even if it were acceptable that compulsory purchase orders or any other matter could be made a local land charge by subordinate legislation, the Lord Chancellor is not the appropriate authority to decide questions which are the responsibility of a variety of other Departments, as almost all ex-Ministers will know.

Mr. Graham Page: As the Minister knows, there are a number of compulsory purchase orders which are already registrable as local land charges. This is nothing new. It is merely saying that we shall in future list them. Without going into the further details of the amendment, I wonder whether the Minister could assure the House not merely that Ministers will look at this matter but that there will be a serious review of it to see whether the Government can carry out the wishes of the Law Commission in clearing up this point about what is registrable in a compulsory purchase order and what is not.

Mr. Davidson: If Ministers are not aware of that by now, they should be aware of the concern that exists about this matter. I am sure that they desire to clear the matter up. I do not know whether the right hon. Gentleman wishes me to go into further details about his amendment. It would appear not to achieve the object he desires. It would enable the exercise of powers of compulsory acquisition to be made local land charges in accordance with rules under Clause 14.
The exercise of a power of compulsory acquisition is an acquisition. That is the conveyance from the owner to the acquiring authority. As the right hon. Gentleman well knows, it would be useless to register such acquisitions, because the land is then in the hands of the acquiring authority and is therefore no longer burdened.
To put it colloquially, if inelegantly, the purchaser wants to know whether the land he seeks to purchase is under sentence of death. He is not concerned with whether the execution has taken place, because that knowledge would be no use to him. The right hon. Gentleman will know that in the vast majority of cases compulsory purchase orders made by local authorities would be revealed by supplementary inquiries. The vast majority of, if not all, compulsory purchase orders must be drawn to the attention of the vendor. If the vendor has knowledge that there is a compulsory purchase order, and conceals that from the purchaser, he will be liable for breach of contract, or the purchase could be rescinded.
I have the utmost sympathy with the case the right hon. Gentleman presented. I hope that at some time all compulsory purchase orders will be registrable as local land charges, but this is not the Bill to achieve that desirable objective.

Mr. Graham Page: I am encouraged by the hon. Gentleman's last few words. I gather that he entirely accepts the principle of the amendment. I think that the wording is correct, in any case, because in many statutes the exercise of a power of compulsory purchase takes place at the time that the notice to treat is served.
If the hon. Gentleman means that he has sympathy with the fact that compulsory purchase orders should be registered


and that he hopes that at some time in the future that will be so, I take that as an undertaking that Ministers will get down to the task of producing a code at some time and, possibly, an amendment to the Bill when enacted and that we shall get compulsory purchase orders properly registered. Purchasers will then know whether their property is unencumbered.
It is no argument to say that the vendor should know. That is an argument against the whole register. A vendor should know every encumbrance on his property. The register is there and the purchaser should be informed.
I take the nods of assent that the Under-Secretary has been giving to mean that at some future time there will be an amendment to the Bill when enacted to make compulsory purchase orders registrable. On that assurance, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.15 p.m.

Mr. Graham Page: I beg to move Amendment No. 2, in page 2, line 23, at end insert—
'(ddd) any planning permission relating to the development or use of land (other than one which by virtue of any statutory provision is deemed to be or to have been granted) under any statutory provision relating to town and country planning whether by a Minister of the Crown, government department or local authority and any refusal of an application for such planning permission;'.

Mr. Deputy Speaker (Sir Myer Galpern): With this amendment we shall take the following amendments:
Government Amendment No. 6.
No. 7, in Clause 2, page 3, line 3, leave out 'granted or (by virtue of any statutory provision)'.

Mr. Page: This is another amendment to the list of land charges in the clause. It deals with the charges on the property arising from the application of town and country planning law. In Committee, some of us urged that, because it was so vital for purchasers to know the planning status and history of properties, planning permissions and refusals should appear in the local land charges register. This amendment would provide for that in the Bill.
It would be an innovation to put into the register details of permissions and refusals under planning Acts. Information is at present normally discovered through the supplementary inquiries one makes of a local authority when applying for an official certificate of search. From the answers to those inquiries, one is led to the register of planning applications. At present, neither planning permissions nor refusals appear, as such, in the land charges register.
Prohibitions or restrictions on the grant of planning permissions do appear. For example, permission may have been granted for the use of premises for a particular purpose, but only for a limited period. That sort of prohibition usually appears in the register, though, because of the decision a few years ago in the case of Rose v. Leeds Corporation, there is even doubt about whether these prohibitions and restrictions are properly registrable as land charges. The Law Commission recommended that they should not be registrable.
That case left local authorities and the legal profession in some confusion. Some authorities continued to register these prohibitions and restrictions as local land charges, while others did not. The Law Commission and the Bill now seek to solve the problem by saying that these prohibitions, conditions or limitations should not be land charges. The result will be that, in order to discover whether a property is the subject of any condition or restriction of that sort, purchasers' solicitors will have to examine the register of planning applications—a most inconvenient register to examine. If the prohibitions appear in the land charges register, one is informed of them on the official certificate of search—a very sample way of finding out if there are any conditions or restrictions.
I recognise that the innovation proposed in Amendment No. 2 might be a severe burden on local authorities, which would have to get geared up to registering that much, but at least the prohibitions, restrictions, conditions and limitations arising out of planning permissions should be registered. This is recognised in the Government's Amendment No. 6. I am sure that the Parliamentary Secretary has recognised the difficulty of searching, in the course of sale and purchase, the register of planning applications as


opposed to searching the local land charges register. He has recognised that in Amendment No. 6 by seeking to provide that in future conditions and limitations created after the commencement of the Bill are registrable as local land charges.

Mr. Douglas-Mann: I very much agree with the spirit of the right hon. Gentleman's proposal but I am a little unclear about the effect of the wording of the Government amendment, should it be made. Clause 2 excludes matters from local land charges. As amended by Amendment No. 6, it will have the effect that
The following matters are not local land charges:—…condition or limitation subject to which planning permission was granted at any time before the commencement of this Act or was or is (at any time) to be granted under any statutory provision".
I am not sure that I follow that wording. Will this achieve what I think we both want to see? It would appear that the effect of the amendment would be that the conditions attached to planning consent in the past or the future are not going to be local land charges, and in the absence of Amendment No. 2, or something comparable, it would appear that we are not to get what we had hoped for following our discussions in Committee. We want conditions attached to planning consent to appear on the local land charges register. Is the right hon. Gentleman satisfied that that will happen?

Mr. Deputy Speaker: I must ask hon. Members not to make lengthy interventions in the speeches of hon. Members. I would rather that they contributed their own speech to the debate.

Mr. Page: The hon. Member for Merton and Morden (Mr. Douglas-Mann) is encouraging me to be presumptuous enough to interpret the Government amendment. As I understand it, it does not provide, as Amendment No. 2 would, for the registration of the planning permission or the fact that a planning application has been refused, nor does it provide for the putting on the register of prohibitions or restrictions or conditions or limitations, in existing planning permissions if they are not there already.
In some cases they are there and in some they are not. The practice varies

according to the local authority. It would have been nice to be able to tell local authorities to put them all on for planning permissions which have been granted. I recognise that that would be a major operation for local authorities, and the last thing anyone here wants is to cause local authorities more expenditure. As I understand it, therefore, the Government amendment is that from the date of the Bill, if a planning permission is granted and contains some conditions restricting the use of the property or development of the property, they will appear as a local land charge.
I realise that this has not given me all that I had hoped for, but I realise, too, that if I pressed for all I had hoped for I should be placing considerable expenditure on local authorities. I think that this is a satisfactory compromise, and I should be prepared to accept it at this stage.
I still think that we shall soon have to have an amending Bill. This matter may be looked at again when we have that Bill, but at least we shall be in the same position as we are now as regards conditions already on the property. As regards future conditions, the position will be improved, in that we shall make certain that they all go down as local land charges, and the purchaser will be warned of them.
In those circumstances, in due course I shall prefer the Government amendment to that in my name.

Mr. Douglas-Mann: I apologise, Mr. Deputy Speaker, for giving occasion for the legitimate reproof that I received from you just now, but I think that my intervention served a useful purpose.
Even to those of us who are lawyers, the drafting of this sort of legislation is not always as clear as it might be, and I have greatly benefited from the interpretation of the Bill and the amendments given by the right hon. Member for Crosby (Mr. Page). I should welcome from my hon. Friend the Minister an assurance that in the light of that interpretation I am right in thinking that subsection (1)(b) will effectively impose the duty to register as local land charges restrictions attached to planning consents, and that it is only the effect of Clause 2(e) that would have limited it. I should like to be assured that as a consequence


of the Government amendment all those conditions attached to planning consents which are registered at present—that is, by local authorities which have not followed the principles of the Rose case—will continue to be registered, and that all conditions attached to planning consents granted in future will also be registered as land charges and will appear on the search—as distinct from the supplementary inquiries.
Subject to such an assurance, I shall be happy to support Government Amendment No. 6 and resist the other amendments.

Mr. Arthur Davidson: The right hon. Member for Crosby (Mr. Page) described my amendment beautifully. He could not have described it better if it had been his own.
The purpose of my amendment is to remove future planning conditions or restrictions from the categories in Clause 2 of matters which are not local land charges under the Bill as drafted. It therefore makes those conditions local land charges, so that those planning restrictions and conditions which many local authorities—those which do not abide by the Rose case—now put on the local land charge register, and which the Bill would have taken off on the basis that they are on the planning register in greater detail, will now appear.
The amendment achieves that which I know my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) and the right hon. Gentleman wanted. I gave an undertaking in Committee to consider the matter, and I hope that I have now removed their fears and anxieties.

Mr. Graham Page: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Graham Page: I beg to move Amendment No. 3, in page 2, line 23, at end insert:
'(dddd) a prohibition or restriction embodied in a scheme under the Town and Country Planning Act 1932 or any enactment repealed by that Act. '

Mr. Deputy Speaker: With this amendment we may discuss Amendment No. 8, in Clause 2, page 3, leave out lines 8 to 10.

Mr. Page: This amendment also concerns a matter of town planning conditions, in this case the very old town planning conditions.
Clause 2(f) refers to
a prohibition or restriction embodied in a scheme under the Town and Country Planning Act 1932 or any enactment repealed by that Act".
From 1932 until the coming into force of the 1947 Town and Country Planning Act, all schemes under the 1932 Act were registrable as land charges, and the conditions attached to permissions were so registrable. The Stainton Committee recommended that the pre-1948 conditions should continue to be registrable, because there are occasions, although only few, when they will still have an effect on property. If the property has been in Crown hands for a period of time, these conditions placed on the property under the 1932 law will still remain an encumbrance to the property
10.30 p.m.
The Bill seeks to remove those from the land charges register, or to say that they are no longer land charges, and to put them in Clause 2 and specifically say that these shall not be registrable as land charges. I suppose from that that the registering authority ought to comb its registers and remove these where they still remain on the register. It seems to me to be more of a burden than saying that they shall remain there. As they are still an encumbrance on some properties, what is the point of removing them now and causing trouble to the local authorities to comb their registers and take them off the registers? It seems unnecessary.
My amendment to leave them as local land charges does not mean any fresh registration at all. We can leave the registers as they are at the moment. It is true that there is some clutter here from old conditions remaining on the register, but some of them may still have effect. Therefore, it seems reasonable that they should be left to be registered as land charges.

Mr. Arthur Davidson: We debated this in Committee. The right hon. Gentleman knows that the history of this matter and the reasons for excluding these restrictions from the categories of local land charges were explained in great detail in paragraphs 40 to 45 of the Law


Commission's Report which forms the basis of the Bill. As the Law Commission indicated, restrictions imposed under pre-1948 schemes are now largely obsolete, because the time for enforcing such restrictions has long expired.
As the right hon. Gentleman said, the only material exception occurs where the Crown has had an interest in property in respect of which a breach of planning control has occurred.
The Law Commission carefully considered this problem and concluded that the advantage of removing these largely obsolete restrictions from the registers outweighed the small risk of doing so. In its view, if the Bill were to provide that the old restrictions, if already registered were to be local land charges it would have to provide that any such restrictions not registered would also have to be local land charges and thus be put on the register, notwithstanding that the vast majority of them have long ago become obsolete.
It is the view of the local authorities that their registers are unduly cluttered, and, although I appreciate the hon. Gentleman's motives in the amendment—

Mr. Douglas-Mann: Would there be any obligation on local authorities to remove from the register those items already registered? This would be relevant in considering the effect of Government Amendment No. 6. Would not they be at liberty to leave on the register those items which had already been registered, but not under an obligation to do so? In practice, it would be more convenient to leave them on.

Mr. Davidson: With regard to those restrictions on planning authorities with which I know my hon. Friend is greatly concerned, if they are already on the register the local authorities will no doubt leave them there, and it would be desirable if they did.

Mr. Graham Page: In those circumstances, I cannot see the point of the Government putting in Clause 2 these prohibitions and restrictions. They will not alter the law at all. Those who are registered will still remain there, because local authorities will not be obliged, according to the Parliamentary Secretary, to remove them from the register. These will never come again. They are all under the 1932 Act and all originated

between 1932 and 1948. With all respect to the Parliamentary Secretary, I should have thought that putting this in Clause 2 and saying that these shall not be local land charges will oblige the local authorities to remove them from the register.
Let us suppose, for example, that after the passing of this legislation a search reveals one of these and, as a result, the vendor loses his sale. Will he not complain to the local authority "This was not a local land charge. You put it on my search. In fact, you told the purchasers something which was not true and, as a result, you frightened them off"? This is a serious position. To avoid it, they have to go through all their registers and remove all the 1932 entries.
I would not go to the gallows on this, or even into the Division Lobby. But it is a silly bit of drafting in the Bill.

Mr. Arthur Davidson: The right hon. Gentleman will know that a very large number of the restrictions that he seeks to put on the register now never went on the register because they were not registrable when they were made. My point is not the difficulty of combing the register but the difficulty of putting things which are very difficult to find out now back on the register.

Amendment negatived.

Mr. Graham Page: I beg to move Amendment No. 4, in page 2, line 25, leave out 'not contained' and insert
'to which no reference is made'.
If I were at the Government Dispatch Box, I would simply rise to my feet and say "Drafting". It is only drafting. In paragraph (e) of Clause 1(1), it is said:
…any charge or other matter which is expressly made a local land charge by any statutory provision not contained in this section.
There are no local land charges made by any statutory provision in that clause, as far as I can see. The local land charges are made by other statutory provisions elsewhere, and, therefore, what is intended by the clause, or what the description should be, is
…local land charges to which no reference is made in this paragraph.

Mr. Arthur Davidson: I shall not say "Drafting", despite the temptation to do


so. These words were considered carefully. In fact, the phrase
…any statutory provision not contained in this section
means any statutory provision other than paragraphs (a) to (d) of the subsection. These paragraphs plainly are statutory provisions contained in the clause. The purpose of paragraph (e) is to bring within the régime of the Bill matters which are made local land charges by statutory provisions not contained in the clause. Therefore, although I accept that this is a drafting amendment, I hope that my words have assured the right hon. Gentleman that the drafting in this case is correct.

Amendment negatived.

Clause 2

MATTERS WHICH ARE NOT LOCAL LAND CHARGES

Mr. Graham Page: I beg to move Amendment No. 5, in page 3, line 1, at end insert:
'of general application in the area of the authority by whom those bye-laws are or have been made'.
The House will recollect that the opening words of Clause 2 are:
The following matters are not local land charges…
One of the matters referred to is
…a prohibition or restriction embodied in any bye-laws".
A local authority has power to make byelaws for the whole of its area or for any part of its area. In that statutory provision for a local authority, there is no restriction on the smallness of the part. It could be a byelaw affecting one property. Certainly it could be a byelaw affecting one street.
One would not expect a byelaw relating to the whole of the district to be registered as a land charge against one property, but if there is some form of selection in that byelaw against some property or properties it should be registered, and only those which are of general application in that area of the authority by which the byelaws are or have been made should be excluded from the discussion of local land charges.
The Law Commission, on page 41 of its Report, explaining why the provision was put in this form, said:
This exclusion is for the avoidance of doubt. It has never been supposed that particular prohibitions or restrictions imposed by statute should be registrable, and byelaws come within that principle.
I am not quite sure that they do. To say that a byelaw is the same as a statute applying to the whole of the land is stretching the meaning of "byelaw" very much.
The Law Commission went on:
Notice of matters so imposed is presumed to be general.
It is already found generally over the whole area, but it is possible for byelaws to discriminate against one property or another. It would put the matter beyond doubt and be of great benefit to purchasers if byelaws not of a general nature but affecting specific properties or streets or squares or a small area were registered against those properties.

Mr. Arthur Davidson: Again I appreciate the notives behind the amendment but I cannot accept it. First, as the right hon. Gentleman appreciates, byelaws are legislation and the public receive notice of such legislation. For instance, there is provision in Section 246 of the Local Government Act 1972, which he knows well, for the deposit and inspection of byelaws in districts and parishes and communities to which they apply.
The right hon. Gentleman said earlier that he has regard, as I know he does, to the fact that local authorities are being urged to spend less and cut out waste. No one in this House wants to add to the burdens and costs of administration of local government. It would be wasteful and contrary to long-accepted principles to register legislation.
I remind the right hon. Gentleman that under the 1972 Act all byelaws can be inspected free of charge. The amendment would increase registration costs and fees at the expense of either the ratepayer or the purchaser, although the relevant restriction could easily be ascertained free of charge outside the local land charge register. The right hon. Gentleman would not wish to add expense and cost in that way.
As adequate notice of byelaws is already available, and as the right hon. Gentleman would not want to add the extra administrative work of singling out individual legislative restrictions on the use of land, or unnecessarily to burden or clutter up local land charge register, I ask him not to press the amendment.

10.45 p.m.

Mr. Graham Page: This is an example of where the Government have utterly failed to use the Bill for a good purpose. The way in which these provisions would be beneficial to those dealing with property would be by moving as much as possible on to the local land charges register so that, when searching it, one really did get to know the legal condition of the property. The Government have, however, resisted any improvements of this sort, and this is yet another occasion on which this proposal has been resisted.
The whole point of any reform of the local land charges register is to give a purchaser as full information as possible without having to search for it elsewhere. We have been told that we must search the register of planning applications. That is bad enough and will increase the costs of conveyancing. I do not know whether the Parliamentary Secretary has tried to find the byelaws of a local authority. If not, I should point out that, after considerable time and trouble in getting to the right person and as there is no complete copy of byelaws in most local authorities, he will have to collect the amendments and tuck them into the right places.
I do not wish to press the amendment further. I merely make the point that the opportunity has been lost of improving the position regarding the sale and purchase of property. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 6, in page 3, line 3, leave out from 'was' to 'deemed' in line 4 and insert
'granted at any time before the commencement of this Act or was or is (at any time)'.—[Mr. Arthur Davidson.]

Clause 5

REGISTRATION

Mr. Graham Page: I beg to move Amendment No. 9, in page 4, line 43, after 'charge', insert
'shall or may be cancelled as prescribed or in default it'.
This is an amendment to Clause 5 which deals with not only the registration but the removal of a local land charge from the register.
Subsection (5) provides:
The registration of a local land charge may be cancelled pursuant to an order of the court.
Right away that seems to be a cumbersome way of achieving not only the removal of clutter but the possibility of an official certificate of search disclosing something which is no longer effective but which, when a prospective purchaser sees it, may frighten him off the sale.
The subsection seems inappropriate, as drafted, because in Clause 14(1) we find:
The Lord Chancellor may…make rules…
(g) as to the cancellation without an order of the court of the registration of a local land charge on its cesser, or with the consent of the authority or body by whom it is enforceable".
Therefore, it is possible to remove the registration without an order of the court.
I would have hoped that in certain cases the Lord Chancellor would make rules making the removal mandatory. In some cases it could be permissive. The removal would not be forced on the local registering authority if there was difficulty in discovering whether a land charge was still in existence. However, there are some instances when it is clear that a charge has died, is obsolete, and ought to be removed from the register. Therefore, I would have hoped that the rules would provide for the local registering authority to remove it. That is the purpose of the amendment.
If the amendment were accepted, subsection (5) would read:
The registration of a local land charge shall or may be cancelled as prescribed or in default of it may be cancelled pursuant to an order of the court.
The words
shall or may be cancelled as prescribed
mean as prescribed by the Lord Chancellor in rules made under Clause 14.
In practice there is considerable clutter—I cannot find a better word—on the register and there seems to be no feeling of obligation by the registering authorities to remove any of it. If they are faced with the statement in Clause 5 that
The registration of a local land charge may be cancelled pursuant to an order of the court.
they will be frightened off from trying to effect removal from the rules when the charge is obsolete.
I would have hoped that the subsection could be brought into line with Clause 14 and that there could be some real effort in future to clean up the register not only to avoid the difficulty of searching through to make entries on the rules, many of which may be obsolete, but to avoid the danger of showing on an official certificate some charge which is obsolete but appearance of which on an official certificate of search is likely to cause great disturbance between the parties to a conveyance.

Mr. Arthur Davidson: In the Government's view the amendment is unnecessary in that the rule-making power in Clause 14(1)(g) is clear enough. Moreover, I am sure that the right hon. Gentleman will accept that the amendment is wrong in implying that a court order for cancellation may be made only in default of a cancellation made without an order of the court. I know that this is not the right hon. Gentleman's intention, but the wording could impede the right of a litigant to apply to the court for cancellation whenever he chooses. The litigant should have that right for that reason and other reasons. I appreciate the right hon. Gentleman's concern, but I would ask him to withdraw the amendment.

Mr. Graham Page: No doubt when the Bill becomes an Act there will be a circular of explanation going out to local authorities, to the registering authorities and to the originating authorities. Very often such circulars encourage public bodies to put matters in hand and to operate an Act. I hope that the hon. Gentleman will encourage registering authorities to look at their registers to see whether they can clear them of the clutter.

Mr. Douglas-Mann: I hope that my hon. Friend will support the plea of the right hon. Member for Crosby (Mr. Page) that there should be a circular to the effect he has outlined. Local authorities should be encouraged to indicate on their local land charges search certificates the changes which will have taken place as a consequence of the Act. I hope that they will indicate not merely those matters which are removable but the matters which have been removed. It will now be clear that local authorities which have not in the past registered planning conditions should indicate the fact in their certificates as a consequence of the Rose decision. It would not be desirable to put that matter into this legislation, but local authorities should be encouraged to indicate to purchasers on the certificate those matters which are now registrable and those matters which are not, so that purchasers will be aware of the situation and the position that obtained in the past.

Mr. Arthur Davidson: I am grateful to my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) for his intervention, which I suspect was made so as to give me time. I was going to say that I am sure the Lord Chancellor will consider the advisability of such a circular. Clearly, it would be desirable for the maximum information to be given.

Mr. Graham Page: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6

LOCAL AUTHORITY'S RIGHT TO REGISTER A GENERAL CHARGE AGAINST LAND IN CERTAIN CIRCUMSTANCES

Mr. Graham Page: I beg to move Amendment No. 10, in page 5, line 16, leave out 'may' and insert 'shall'.

Mr. Deputy Speaker: With this we may take Amendment No. 11, in page 5, line 17, leave out from 'register' to end of line 23.

Mr. Page: I think that the clause will be found to be very useful, but I hope that the amendments will be accepted to make it even more useful. The clause


deals with the case in which a local authority or other public body expends money, or is in the course of expending money, which may eventually become a charge on the property. The authority may register a general charge before it knows the amount of money that will make the specific charge. Again, I hope that the purchaser, by searching, will find that there is this specific charge in anticipation at a very early stage—that is to say, the local authority should register a general charge when it starts to spend this money. The authority may do so. It is permissive for it to do so under the clause as drafted. My amendment would make it obligatory on the local authority, immediately it starts spending that money, to put a general charge on the register against the property.
The cases that come quickly to mind are those involving road charges. It is only when the whole of the money has been spent, the procedure has been completed, the end of the road has been made up, and everybody knows what the figure is that there is an obligation to register the charge against the property, but a purchaser buying in the meantime will want to know whether there is the possibility of a charge accumulating which may land on the property after he has bought it. Road charges are not the only example. Suppose the local authority has stepped in and repaired a listed building. It has the right to put the expenditure as a charge on the property.
I hope that in all those cases where a local authority starts spending money which may eventually become a specific charge on the property, and it has the right, in its discretion, to register a general charge, the Bill will place an obligation on the local authority to register that charge at that time so that any purchaser knows full well that this is a charge occurring on the property.

Mr. Arthur Davidson: I appreciate the motives behind the amendment, and I agree with the right hon. Gentleman about the need to give the maximum information to the purchaser, but he will know that under subsection (2) the registration of a general charge is discretionary. There is a reason for that. A local authority may not wish to enforce such a charge against particular land—

for instance, in a case in which road works are carried out for the benefit of the general public and not for those fronting on to the road. Indeed, the works may not be for their benefit at all; they may be very much to their inconvenience. In those circumstances, the local authority would not wish to enforce the charge.
In such circumstances, the amendment would achieve a blight which could affect the sale value to the occupier of a particular house. It would be wrong if, as in many cases, the local authority had no intention of enforcing such a general charge, to say that it must register it. For those reasons, I must resist the amendment and ask the right hon. Gentleman to ask leave to withdraw it.

Mr. Graham Page: I do not understand the Minister's argument. He says that the local authority may not intend to enforce the charge. It will not enforce it if the money is paid before it becomes a specific charge, but if it is not paid, it will undoubtedly bite on the property. It will be made a charge on the property so that in the end the local authority can get its money out of the property. One might say that any land charge will be a blight on the property. Of course it will, to that extent. A purchaser wants to know whether it will be blighted before he enters into a purchase. I cannot accept the Minister's argument and I cannot withdraw the amendment. I shall have to leave it to be negatived.

Amendment negatived.

Mr. Graham Page: It may be helpful if I indicate that I shall not move Amendments Nos. 13 and 14.

Clause 10

COMPENSATION FOR NON-REGISTRATION OR DEFECTIVE OFFICIAL SEARCH CERTIFICATE

11.0 p.m.

Mr. Graham Page: I beg to move Amendment No. 15, in page 7, line 10, leave out 'as registered in it'.

Mr. Deputy Speaker: With this we may consider also Amendment No. 17, in page 7, line 11, at end insert 'as registered in that register'.

Mr. Graham Page: This is a drafting amendment. It deals with compensation for non-registration of a defective official


register certificate. If an official certificate of search fails to show a local land charge which is in existence and is not registered, or even if it is in existence and is registered and the official certificate of search fails to show that there is such a charge, the purchaser is entitled to compensation if he has made losses through that very certificate.
The wording here speaks of a charge that
was not shown by the official search certificate as registered in that register",
in lines 5 and 6, and that seems to me grammatically absolutely right: but when one comes to lines 10 and 11, the words are turned round to read:
was not shown as registered in it by the official search certificate",
which reads as if the charge would be registered by the official search certificate, whereas, if one keeps to the words of the previous paragraph, allowing it to read:
was not shown by the official search certificate as registered in that register",
it complies with the previous paragraph and makes grammatical sense.

Mr. Arthur Davidson: I have news for the right hon. Gentleman. I need not speak at length, because I intend to accept both amendments.

Amendment agreed to.

Amendment made: No. 17, in page 7, line 11, at end insert
'as registered in that register'.—[Mr. Graham Page.]

Mr. Graham Page: I beg to move Amendment No. 18, in page 8, line 37, at end insert
or by separate proceedings based upon fraud'.

Mr. Deputy Speaker: With this we may discuss Government Amendment No. 19, in page 8, line 37, at end add
'or on grounds of fraud'.

Mr. Page: This amendment arises because there is for a purchaser who has made a loss as a result of a charge not being registered which should be, or an official search certificate erroneously showing that there is no charge, an absolute right to compensation. The registering authority cannot, for example, say: "It was not entirely our fault, and we charge a joint tort feasor in the vendor, because he should have disclosed

and was negligent in not disclosing this, and therefore we ask for a contribution from him".
The Bill is clear about it. It says in subsection (6):
Where any compensation for loss under this section is paid by a registering authority, no part of the amount paid, or of any corresponding amount paid to that authority by the above, shall be recoverable by the registering authority or the originating authority from any other person except as provided by subsection (5) above or under a policy of insurance.
So the registering authority, faced with a claim for compensation, would have no right to bring a third party into the proceedings and thereby clutter up the proceedings against the authority by the person entitled to compensation.
In Committee, we asked what would happen if there were fraud and not just mere negligence in disclosing. Was the local authority to be prevented from taking its proper right of action against those who had been fraudulent? For example, suppose that Mr. X is selling property to Mr. Y which is subject to an improvement line which should be registered as a charge and which makes the property much less valuable for development purposes. Let us further suppose that the lady clerk employed by the registrar of local land charges is Mr. X's girl friend, and, in collusion, they plot to have any mention of the improvement line removed from the official certificate of search.
Surely, in those circumstances of a fraud between the vendor and someone employed by the registering authority, although the purchaser is protected and the clause to that extent is beneficial to a purchaser or, as the case may be, a mortgagee, the provision goes too far in penalising the registering authority by preventing it from taking action where fraud arises.
I am delighted to see that our arguments in Committee prevailed on the Government and that Amendment No. 19 recognises the principle that I have been arguing. Of course, I prefer my own amendment, because No. 19 excludes the bringing in of the fraudulent person as a third party in the action; it would make it necessary for the registering authority to take separate action. But I shall not carp about that. The principle has been accepted. If the Minister can satisfy me that there is no real difference between


the wording of the two amendments, I shall readily accept No. 19.

Mr. Arthur Davidson: I assure the right hon. Gentleman that there is no real difficulty. The wording is slightly different, but the purpose is the same. Although the right hon. Gentleman no doubt prefers his amendment, I am instructed that mine is better. In those circumstances, perhaps he will ask leave to withdraw the amendment.

Mr. Graham Page: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 19, in page 8, line 37, at end add
or on grounds of fraud"—[Mr. Arthur Davidson.]

Clause 14

RULES

Mr. Graham Page: I beg to move Amendment No. 21, in page 10, line 30, after 'power', insert
'(a) to impose an obligation upon registering authorities and originating authorities not to register nor to keep registered as a local land charge any matter which is not, or which has ceased to be, effective as a local land charge within the meaning of section 1 of this Act; and (b)'.
The amendment would impose an obligation on the registering authority not to register something which ought not to be registered, and not to maintain on the register charges which are no longer effective.
Throughout, we have been considering the protection of the purchaser against lack of information from the register and against a failure to register a charge which should be registered and of which the purchaser should be informed. The Bill lays no obligation on the registering authority not to register something which should not be registered, or not to keep on the register something which should not be kept on the register.
One might wonder "Why bother about that? What does it matter if there is something on the register? What we are concerned with is that the purchaser should be told of every encumbrance on the property." But—I think I mentioned this on previous amendments—if an official certificate of search shows some en-

cumbrance which ought not to be registered against the property, it may have the result of the sale being broken off because the purchaser thinks he is buying an encumbered property.
In those circumstances it is the vendor who suffers. I presume that he would probably have an action for negligence against the registering authority, but it would be rather a difficult case for him to prove, and there might be some doubt in the fact that it is not mentioned anywhere in the Bill that he is excluded from such an action. We have been so specific in giving the purchaser the right to claim compensation that that might have the effect of excluding any further claims against the registering authority by the vendor.
Far be it from me to put extra burdens on registering authorities or on those from whom charges originate, but it is important that we should have complete reliance on the register. If there is anything wrong in the register, anyone who suffers loss from that error should be entitled to compensation.
For that reason I tabled this amendment, to place an obligation on registering authorities to keep the register straight and to see that it includes only proper land charges.

Mr. Douglas-Mann: This is the first occasion on which, during the passage of this Bill, I find myself in disagreement with the right hon. Member for Crosby (Mr. Page). Does he want to have removed from the register all those conditions attaching to planning consents which provide most of the information we need when dealing with property which has had planning conditions imposed on it in the past? The conditions imposed before 1948 are all registered as local land charges. He gets that information when he makes a search.
If the amendment were accepted, local authorities would be so busy trying to find out all the things that they ought to remove that they would not have enough time to find out what they ought to register.
I hope the amendment will be resisted. Notwithstanding the fact that some things are not going to be compulsorily registrable, I hope that the majority of those matters which were registered in the past


will be available on the search certificate. In fact, I suspect that the right hon. Gentleman would prefer it also.

Mr. Arthur Davidson: I can assure my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) that I shall resist this amendment, although for slightly different reasons.
The rule-making power in subsection (1)(g) is sufficient to enable rules to require cancellation where appropriate. The existing rules already provide for cancellation of charges which have been discharged or have become unenforceable. The general power in subsection (1) is also sufficient to enable the making of rules to oblige local authorities not to register matters which are not local land charges, although such a rule would seem unnecessary because anything which is not a local land charge under the Bill is plainly not registrable. If it ceases to be a local land charge, it should be taken off the register. The registering authority cannot be expected to reach a judicial decision whether a matter is or is not a local land charge. In cases of doubt it is often the practice of authorities to register the item for safety's sake.
11.15 p.m.
I have agreed with the right hon. Member for Crosby (Mr. Page) throughout that as much information as possible should be put on the local land charges register. It would be wrong to place a definite obligation on the registering authority not to register irrelevant material and to put the authority at risk of being in breach of that obligation owing to doubt as to the status of the particular matter in relation to local land charges.
In those circumstances, I ask the right hon. Gentleman not to press his amendment.

Mr. Graham Page: As I have been deserted by my professional, if not parliamentary, colleague, the least I can do is to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Graham Page: I beg to move Amendment No. 22 in page 10, line 35, at end insert
'which shall be subject to annulment by resolution of either House of Parliament'.

This amendment relates to the rules to be made by the Lord Chancellor to bring into operation the machinery of the Bill. This power has been with the Lord Chancellor ever since we have had local land charges.
Subsection (3) states merely that
The power to make rules under this section shall be exercisable by statutory instrument.
The amendment makes it necessary for such a statutory instrument to be subject to parliamentary procedure—the negative procedure which enables it to be annulled by resolution of either House of Parliament. These are important rules, particularly with regard to the changes in what is and is not to be a local land charge. The House should have the right to deal with these rules under the normal parliamentary procedure of annulment if it wishes to do so. We are seldom able to bring a Prayer before the House these days. At least this amendment gives an opportunity for attention to be called to rules of this sort, which are of more importance under the Bill than they had been previously.
We should have some form of parliamentary procedure. As the Bill stands, the rules do not even have to be laid before Parliament, if I am correct in my interpretation of that subsection. On this occasion I am asking that right hon. and hon. Members should have an opportunity by way of a Prayer in this House, to raise anything on these rules.

Mr. Arthur Davidson: As the right hon. Member for Crosby (Mr. Page) will know, the rules are simply the machinery for giving effect to the Bill. On reflection, he might agree that they hardly merit the extent of parliamentary control that he is advocating.
Local land charge rules are not subject to such control, and have not been since 1925. Despite large numbers of amending and consolidating rules, I am assured that it is not thought that any of these have ever been the subject of parliamentary disapproval. I am sure that the right hon. Gentleman is aware that a number of crucial matters at present dealt with by rules, notably the procedure and effect of official searches, are dealt with in the Bill. Therefore, I take issue with him on that matter. The new rules will, to that extent, be less important. The right hon. Gentleman was suggesting


that they would be more important. He will know, because he is a great expert on statutory instruments—

Mr. Graham Page: Will the Minister confirm that the intention under the Bill is that this Statutory Instrument should not even be laid before Parliament? There is at least a distinction between an instrument which is not laid, an instrument which is laid, and an instrument which has some parliamentary procedure. I believe that he is treating the House with a little contempt. Those who have put this sort of law into operation have taken a great interest in the Bill throughout. At least it is right for Parliament to be informed that these rules are being made. This is not entirely a technical matter. If the rules are wrong in some respect—

Mr. Deputy Speaker: Order. The right hon. Gentleman should be making an intervention, not a lengthy statement.

Mr. Page: I apologise, Mr. Deputy Speaker. I had forgotten that I had asked to intervene. I thought that I was replying to the debate.

Mr. Davidson: I assure the right hon. Gentleman that I am not seeking to be discourteous to the House. The absence of any negative resolution procedure does not remove the rules from parliamentary scrutiny. The Select Committee on Statutory Instruments—the right hon. Gentleman is, if not the greatest living expert on statutory instruments, certainly the greatest expert on statutory instruments in the House—can be relied upon to consider questions concerning fees, the unusual use of the rule-making power, matters of drafting, and so on.
The right hon. Gentleman said that he would not go to the gallows for another amendment. I would not go to the gallows on this amendment. However, on balance I do not think that the amendment is necessary.

Mr. Graham Page: If I may now make a speech in reply, Mr. Deputy Speaker, I am very dissatisfied—not with the flattery, with which the hon. Gentleman tried to soft-soap me. I think that the rules will be important. When I attempted to extend my intervention into a speech I was saying that these matters may appear to be technical, but if there

are matters which are wrong in the rules and which seem to be wrong to those who practise in the profession it will mean an extra cost in conveyancing and in purchasing a home. To that extent, the rules should be subject to survey by Members of the House.
I am not satisfied on the answer I have received that I should be right to ask leave to withdraw the amendment. I urge the hon. Gentleman to accept it. Under our present practice in the House it will impose no great burden on the time of the House if a Prayer goes down drawing attention to an error in the rules. I am anxious to ensure that the rules do not increase the cost of conveyancing and of purchasing a home.

Mr. Arthur Davidson: I said that I would not go to the gallows on the amendment. I am prepared to strike a blow for parliamentary democracy. The right hon. Gentleman has made a cogent case. He has been of great help on the Bill. No harm will be done by, and perhaps there will be a marginal gain from, accepting the amendment.

Amendment agreed to.

Clause 16

INTERPRETATION

Mr. Graham Page: I beg to move Amendment No. 23, in page 11, line 12, at end insert—
local authority" means the council of a county, Greater London, a district, a London Borough, a parish, a community (in Wales) and a water authority, a new town development corporation, the Common Council of the City of London and a body appointed by the Secretary of State to exercise reserve powers under the Community Land Act 1975
I thank the hon. Gentleman sincerely for the long and detailed letter he wrote to me on all the points we raised in Committee. It was kind of him and his advisers. The letter referred particularly to the point raised by the amendment. I am grateful to the hon. Gentleman for the way in which he gave us information after the Committee stage and for the great patience he displayed in Committee. He was faced by a few of us who come up against these things in practice and who must have appeared to be talking a lot of gobbledygook at times. We are grateful to the hon.


Gentleman for his patience and for his response on three very important points.
I moved this amendment only to say these few words. Without troubling the Minister, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Motion made, That the Bill be now read the Third time.

[Queen's Consent, on behalf of the Crown, signified.]

Question put forthwith, pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, with amendments.

STATUTORY INSTRUMENTS

Motion made, and Question put forthwith pursuant to Standing Order No. 73A, (Standing Committee on Statutory Instruments),

NORTHERN IRELAND

That the Artificial Reproduction of Animals (Northern Ireland) Order 1975, a draft of which was laid before this House on 13th October, be approved.—[Mr. Thomas Cox.]

CINEMATOGRAPHS AND CINEMATOGRAPH FILMS

That the Cinematograph Films (Collection of Levy) (Amendment No. 4) Regulations 1975, a draft of which was laid before this House on 13th October, be approved.—[Mr. Thomas Cox.]

That the Cinematograph Films (Limits of Levy) Order 1975, a draft of which was laid before this House on 13th October, be approved.—[Mr. Thomas Cox.]

Question agreed to.

PARLIAMENTARY COMMISSIONER FOR ADMINISTRATION

Ordered,
That, notwithstanding the Order of the House of 22nd November 1974 relating to nomination of Members of the Select Committee on the Parliamentary Commissioner for Administration, Mr. Mark Hughes and Mr. Michael Stewart be discharged from the Committee and Mr. Ivor Clemitson and Mr. W. T. Williams be added to the Committee for the remainder of this Parliament.

Ordered,

That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

ADJOURNMENT

Motion made and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

LEGAL AID

11.26 p.m.

Mr. Greville Janner: I am pleased to have this opportunity to raise the problems of those people who appear before industrial and other tribunals without the benefit of legal aid.
This is a matter which my hon. and learned Friend the Solicitor-General had been known to raise before he achieved his present high office. I am delighted that he is to reply to this debate because, along with the Lord Chancellor, he was a leading campaigner in the battle to achieve fairness for people appearing before industrial and other tribunals. I know that, in donning the robes of office, they have not changed the views they held then. I pay tribute to my hon. and learned Friends for their efforts to achieve legal aid for people appearing at these tribunals, but now they have the power not merely to express their views, but to put them into effect. I trust that in his reply my hon. and learned Friend will indicate that we shall soon get results and not just hopes.
I will make the case again, though not with the brilliance and elegance with which it has been made in Fabian pamphlets and elsewhere. Tribunals have new and enormous powers. They began with redundancy payments in 1965 and their power has been extended since then. They can now give up to £5,200 in compensation for unfair dismissal, and in December they will have powers in issues of equal pay and sex discrimination. In addition, the race discrimination proposals, which have been mooted in a White Paper and which we expect to hear in the Queen's Speech, will involve these tribunals.
Yesterday, we completed our consideration of the Employment Protection Bill under which huge powers have been given to industrial tribunals where people can claim re-instatement in their jobs, get awards of up to a year's pay in some circumstances or claim up to three


months' pay on top of redundancy pay for not having been given sufficient notice of impending redundancies.
The hard-working tribunals have a legally qualified chairman and two lay members. It is totally wrong that the chairman often has to act both as adjudicator and advocate for one side. He has to place before himself the facts and the law on behalf of one side, while the other side's case is argued by a lawyer. Time after time, one sees employers represented by skilled, experienced advocates who are prepared to present the facts in the best light and to argue the law on behalf of their clients.
Even with the change in the burden of proof introduced in the Trade Union and Labour Relations Act, a Written Answer I received a week ago indicates that two-thirds of the cases brought before tribunals fail. It is a rate which has dropped from 70 per cent. to over 60 per cent. as a result of the changes which have been brought about by the Government, changes for which we must thank my right hon. Friend the Secretary of State for Employment and his team. But a failure rate of nearly two-thirds indicates that there is something wrong in the procedures of the tribunals. That does not mean that a lawyer is needed in every case or that we do not appreciate the simplicity of the procedures. It means that where there is a case involving complicated questions of fact or law and, potentially, vast sums of money the case is not being properly put.
Even in those cases which are won the amounts of compensation which have been awarded tend to be pathetic. The majority get about £100, some two-thirds get less than £250, and there have been perhaps only half-a-dozen cases where people have got the two-year cushion provided for by this House in one of those rare occasions of unanimity between the two sides. There is no two-year cushion in practice. People do not know how to claim the adjournment so as to prove their greater loss or damage. They are not legally represented.
I pay tribute to the trade unions and their efforts on behalf of their members before tribunals. Sometimes it is done by skilled officials of the unions and at other times by courageous shop stewards. I know of such a shop steward in the footwear industry in my constituency. This

lady has been active in the Labour Party for many years. She came to see me one night in a state of terror saying that she had to appear the following morning to represent one of her members. As well as being a shop steward and a skilled footwear worker, she is also a grandmother. She appeared before the tribunal the following day. Her feelings were those that my right hon. and learned Friend and I may have experienced when appearing before other courts. She did her best. But that is not the way in which people should be represented. People should have the right to representation by lawyers.
Whenever a lawyer in this House says that there should be more legal aid he is usually greeted with catcalls and cries of "Feathering your own nest". No one ever says that when a doctor says that people need more medicine. There are worthy doctors in this House who are cheered when they say that the health service should be strengthened. I can deny any interest of that sort in this matter. I have not appeared before an industrial tribunal for many years. Queen's counsel do not and never will get there, and therefore I feel free to say that it is just as important for people to have legal aid before a tribunal as it is to have a doctor when they are ill.
Such people need help. That should be part of the family system, the Welfare State of which we are so proud. It is a person's right and privilege in this country that he should have help when he is ill and when he needs a lawyer. Very often a person will get that help in major cases in the High Court and in less important cases in the county court as well as in criminal cases. He gets help in minor cases, but when he is a potential claimant of over £10,000, appearing before an industrial tribunal, he cannot get legal aid.
He can get up to £25 of legal advice and help if he has no money to prepare his case under the legal aid and advice scheme, but when he gets to the tribunal he has to fight it on his own, or with the help of his union if he has one, and with the help of the union official if that representative is able and willing to assist him.
Our resources are limited, and we are not in a position to spend vast sums on improving the system under which we help people. I know that we are in the


middle of a recession. However, we must adjust certain priorities. I am sure that my hon. and learned Friend will have seen, as I have, grave hardship caused to people who have not been able to obtain the legal representation which they require.
While I have dealt with industrial tribunals, because they constitute an area about which I happen to know most, what I have said applies with equal force to many other tribunals. I have appeared on behalf of constituents before, for example, the General Commissioners of National Insurance. It was only a matter of fortune that my constituents had a Member of Parliament who was a lawyer. Otherwise, they could not have had a lawyer to argue complicated points of law. There are many tribunals where no legal aid is available, and where people's homes, futures, health and financial security are at stake.
In extending to my hon. and learned Friend my congratulations on having the good fortune to reply to a debate in which the case has been advanced in words of which he himself would no doubt have been proud, I ask him to give me a reply which I want to hear, and, much more important, a reply which will benefit those who need help.
I was pleased to note that in another place last week my noble Friend the Lord Chancellor said that a review was under way. I hope that my hon. and learned Friend can give an indication that the review will be completed swiftly, and that we shall not have long to wait before its results are placed before my noble Friend. I hope that those results will then be made available to the public, and that steps will be taken hot foot upon publication.
In the hope that my hon. and learned Friend will provide such a happy answer at this hour of night, I gladly surrender the Floor to him.

11.37 p.m.

The Solicitor-General (Mr. Peter Archer): It will not surprise my hon. and learned Friend that, not for the first time in our careers, I agree with 90 per cent. of what he says—[Interruption.] The other 10 per cent. we shall deal with in a moment.
The case which I attempted to make in a previous incarnation, and to which my hon. and learned Friend referred so kindly, was wholly consistent with what my hon. and learned Friend said tonight. Being in Government has a tendency to modify one's views, but mine have not been modified in that respect. Equally, the views of my noble Friend the Lord Chancellor and my right hon. and learned Friend the Attorney-General have not been modified either. We should all like to see legal aid extended to tribunals, which, as my hon. and learned Friend says, play an increasingly important part in the lives of ordinary people.
It has been argued on occasion that legal representation is not always desirable and evidence was given to the Adivsory Committee to that effect. It was pointed out that tribunals were intended to be informal, and that one should not encourage undue legalism. It is true that in many tribunals one has a helpful chairman, who tries to assist the litigant in person to put his case. Perhaps most important is the point my hon. and learned Friend made that often help is readily available from people who are not qualified lawyers, the class of people who have come to be called the Mackenziemen.
The litigant may take a friend to the tribunal. The Citizens' Advice Bureaux often lend substantial help in this direction, and, perhaps most important, the trade unions have provided help on a large scale, with conspicuous success.
There is no question of my or my right hon. and learned Friend's discouraging such help. As I said elsewhere a few weeks ago, the unmet need is so vast that in the foreseeable future we should encourage every source of meeting it. I also believe that such help fulfils an important function in its own right. I go so far as to say that in some kinds of case a trade union official could do a better job than a lawyer.
So I would not want to suggest that every tribunal case ought to be argued by a lawyer. Recently the Child Poverty Action Group declared that possibly it was less important at the moment to provide legal assistance in tribunals than to reform some of the procedures of the tribunals themselves. But the fact remains that there is a very strong argument in


many cases for providing the services of a lawyer.
While we retain the ultra vires rule in our public administration—and I have not heard any arguments for changing it—there will be cases where a tribunal is confronted with the question whether certain statutory conditions have been fulfilled, and that may entail a minute consideration of a subsection of an Act or a sub-paragraph of regulations, and of the rules of construction evolved by the courts.
Those questions in many cases can be argued adequately only by a trained lawyer, and if the ordinary claimant appears without trained legal representation, even with skilled lay representation, he may find himself in difficulties.
I believe, as does my noble Friend, that we should make provision for that kind of situation, and the Lord Chancellor's Advisory Committee, in its 24th Annual Report, reached the same conclusion.
I would only add that the incidence of cases of that kind varies from tribunal to tribunal. No doubt such cases arise fairly frequently before industrial tribunals, and it is true, as my hon. and learned Friend said, that there has been an increase in the number of functions of industrial tribunals. They play a very important part in the lives of ordinary people. But we may find ourselves in difficulties if we try to compare the figures for various kinds of tribunals, if only because figures of this kind depend to a great extent on the definition of what we are looking for.
The Advisory Committee said:
We do not suggest any order of priority as between different tribunals since we consider that such an approach would be unsound.
I rather share that view.
I should like to mention two other matters about industrial tribunals. The first is that they have legally qualified chairmen, and it is right to echo the tribute that my hon. and learned Friend paid to them. They assist the litigants in person as far as they can, and very often that assistance is very substantial. And it is particularly in relation to industrial tribunals that we are most likely to find trade union assistance available. But, having said that, I fully take his point.
With regard to what my hon. and learned Friend said about the availability not of representation but of advice, it is true that, although representation is not at present available, advice is available under the green form scheme. To correct what he said, if I may, it is not advice only up to £25. It is without limit. Application can always be made for an extension of the £25, and very often it is readily available. We ought to make that as widely known as possible among those who have occasion to go before tribunals.
Often one can marry the lay representation scheme with the green form scheme. A litigant takes along his trade union official or friend and they put the case to the solicitor. The solicitor advises them on the points of law which are likely to arise and the official or friend goes to represent the litigant. It is not as satisfactory as representation. One cannot always foresee what will arise in a case, and a layman may not argue the points of law as skilfully as a lawyer. But at least at the moment this is available, and the more widely it is known the better.
My hon. and learned Friend indicated where our immediate difficulties lie. It has not escaped his attention that at present public spending is severely restricted. It is superfluous for me to argue the importance of winning the battle against inflation. That has already been done by others better qualified. But I add that it is important for the very people whom my hon. and learned Friend has in mind tonight—those facing redundancy, those on short time, those in receipt of unemployment benefit. I am sure that they will readily appreciate the problems that we have in winning what, for them, may be an even bigger battle than their tribunal case.
No member of any Government wants to enter into a wrangle with his colleagues in other Departments about whether it is more important for someone to have medical advice or legal advice, or about which is more conducive to the sum of human happiness. I should not like it to be thought that the kind of assistance for which my hon. and learned Friend has argued is less important than any of these other matters, and certainly my noble Friend, my right hon and learned Friend the Attorney-General and I try to put this case when the occasion arises. Equally,


I should find it difficult to tell my constituents that they could not have a new wing to the local hospital because we had persuaded the Treasury, instead, to spend more money on legal aid.
For the moment, we must look to rearrangements within the budget if we want to rearrange our order of priorities. There are a number of improvements in the legal services for which we have all argued at one period and which to some extent now compete for the available resources.
First, there is a strong case for raising the limits for existing legal aid to bring a greater proportion of the people within them. Twice in the lifetime of this Government the limits have been increased. However, I do not want to take a false point. We have increased them in order to keep pace with inflation. Our running has been to stay in the same place.
Equally, there is a strong argument that there should be an increase in the number of law centres, with at least some kind of subsidy from central Government. Many people regard that as an important part of the legal services which we hope to see in the future. The problem at the moment is the converse one. It is to ensure that the number of law centres is not reduced for economic reasons. This year, my noble Friend allocated £100,000 from the Vote to keep some of the existing law centres in existence.
What place does my hon. and learned Friend's requirement have in this scale? It is a difficult decision. For those who have argued for all these extensions, it is a heartrending one. It is important that we get the answers right and, for that purpose, we need all the information that we can get.
As my hon. and learned Friend said, my noble Friend the Lord Chancellor has commissioned a full inquiry by Mr. Richard White into the unmet need for legal services. My hon. and learned Friend asked what I could say about that. I can tell him that the report will be in the hands of my noble Friend by the beginning of the next parliamentary Session, so we have not long to wait. When it is in his hands, we can consider all these matters. But I hope that my

hon. and learned Friend will accept that it would be a mistake to take these decisions in advance of that report.

Mr. Greville Janner: Will my hon. and learned Friend indicate what happens after the report gets into the hands of our noble Friend the Lord Chancellor?

Mr. Archer: In the first instance, obviously my noble Friend will consider it. What happens next will depend to some extent on what is in it. I cannot say more precisely whether it will be published in the form in which it reaches the table of my noble Friend, or in what form the discussion will proceed, but I hope that decisions will be taken in consequence of it in the very near future. I am sure that my hon. and learned Friend will accept that I am as anxious as he is to see that that is done.
One further aspect of this is that even when legal aid is available, not all practising lawyers are skilled in this kind of work. Until recently, matters like redundancy payments did not figure largely in a lawyer's training. It was not the fault of the lawyers. It did not often occur to members of the public to consult them. Perhaps we have to revise our concept of what is included in the term "law".
We are making progress on two fronts. A larger number of universities are running courses on welfare law, and in order to draw attention to solicitors with this kind of expertise the Law Society is arranging for referral lists to be available in every district throughout the country. Those who want the services of a solicitor will be able to look at the list and see which solicitors are available for which kind of service.
This is very important to those looking for this kind of advice, and it is being done very much with the Lord Chancellor's encouragement. At the end of the day, these problems are not easily separable one from the other. It is our aim to provide the public with the best legal services that the country—which means the public—can afford, and all these elements will be part of those services.
I am grateful to my and learned Friend for raising this question. It is a matter which requires to be debated, and


the more frequently it is debated the better. I should like to see debates of this kind in which not only lawyers take part. Not only lawyers are qualified to take part. It is helpful to know from the lay public the views emerging from their experience. Perhaps we should remind our colleagues in the House that debates

on such matters are for the benefit not of the lawyers but of those they exist to serve.

Question put and agreed to.

Adjourned accordingly at nine minutes to Twelve o'clock.